MON LOUIE M.

FERRER
MBA
CASE 2-1 MAYNARD COMPANY (A)
QUESTION 1
Maynard Company
Balance Sheet
As of June 30
June 1
ASSETS
Current Assets
Cash....... $ 34, 983
Accounts Receivables
21, 798
Note Receivable, Diane Maynard.
11, 700
Merchandise Inventory.
29, 835
Supplies on Hand...
5, 559
Prepaid Insurance..
3, 150
Total Current Asset
Non-Current Assets
Land
Building... 585, 000
Less: Accumulated Depreciation (156, 000)
Equipment...
13, 260
Less: Accumulated Depreciation
(5, 304)
Other Non-current Assets..
Total Non-Current Assets..
Total Assets.
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Accounts Payable...
8, 517
Bank Notes Payable...
8, 385
Taxes Payable.
5, 700
Accrued Wages Payable
1, 974
Total Current Liablities
Non-current Liabilities
Other non-current liabilities.
2, 451
Total Non-current Liabilities
Total Liabilities..
Shareholders Equity
Capital Stock. 390, 000
Retained Earnings
221, 511
Total Shareholders Equity.
Total Liabilities & Shareholders Equity

June 30_______
$ 66, 660
26, 505
0
26, 520
6, 630
2, 826

$ 107, 025

$ 129, 141

89, 700

89, 700

429, 000
7, 956
4, 857
531, 513
$ 638, 538

585, 000
(157, 950)
36, 660
(5, 928)

427, 050
30, 732
5, 265
552, 747
$ 681, 888

21, 315
29, 250
7, 224
2, 202
24, 576

59, 991
2, 451

2, 451
27, 027

2, 451
62, 442
390, 000
229, 446

611, 511
$ 638, 538

619, 446
$ 681, 888

QUESTION 2
In the Maynard Company balance sheet most account has a significant increase from June 1 to
June 30. Including these accounts are Assets: Cash, Accounts Receivables, Supplies on Hand, Equipment,

and other Non-current assets; Liabilities: Accounts Payable, Bank Notes Payable, Taxes Payable &
Accrued Wages Payable; Shareholders Equity: Retained Earnings. As we can see, Cash increased from
34, 983 of June 1 to 66, 660 of June 30. This increase is due to the increase in Accounts payable, Bank
Notes Payable and other cash-generated operations of the company. Another reason is the collection of
Note Receivable from Diane Maynard. Purchases of equipment and other supplies are major use of cash
thats why we could observe that the current ratio of 4.32 in June 1 has fallen to 2.15 in June 30 which
makes the company increased its investments.
QUESTION 3
Retained Earnings has not increased by the amount of June net income of $ 19, 635 because Diane
Maynard who owned all the stock of the company declared herself an $ 11, 700 dividend which she used
to repay her loan from the company. Thats why the retained earnings is increased only in the amount of
$ 7, 935.
QUESTION 4
As of June 30, having a Shareholders Equity amounted to $ 619, 446 does not necessarily reflects
that this is the worth of the company. If at this time if the company has to be liquidated, the net proceeds
of the sale of assets, which is, net of liabilities can be lower than $ 619, 446. If the going concern concept
has to be applied that it will continue to operate for an indefinitely long period in the future and having a
typical net income of $ 19, 635, I think this will give the company a greater value.
CASE 2-3 LONE PINE CAF (A)
QUESTION 1
Lone Pine Caf
Balance Sheet
As of November 2, 2005
ASSETS
Current Assets
Cash
Inventory
Prepaid Expense
Total Current Asset
Non-current Asset
Caf Equipment
Total Non-current Asset
Total Asset

$ 10, 172
2, 800
1, 428
$ 14, 400
54, 600
54, 600
$ 69, 000

LIABILITIES & OWNERS EQUITY

Notes Payable
21, 000
Capital, Mr. Antoine
16, 000
Capital, Mrs. Antoine
16, 000
Captial, Mrs. Landers
16, 000
48, 000
Total Liabilities & Equity
$ 69, 000

QUESTION 2
Lone Pine Caf
Balance Sheet
As of March 30, 2006
ASSETS
Current Assets
Cash
Inventory
Prepaid Expense
Total Current Asset
Non-current Asset
Caf Equipment
Total Non-current Asset
Total Asset

$ 13, 542
1, 953
833
$ 16, 328
52, 155
52, 155
$ 68, 483

LIABILITIES & OWNERS EQUITY

Accounts Payable
1, 583
Notes Payable
18, 900
Capital, Mr. Antoine
16, 000
Capital, Mrs. Antoine
16, 000
Captial, Mrs. Landers
16, 000
48, 000
Total Liabilities & Equity
$ 68, 483
QUESTION 3
Disregarding the marital complications, I suppose that the partners would have been able to
receive their proportional share of the equity determined in Question 2 if the partnership was dissolved
on March 30, 2006 because on the formation of the partnership they have a contract and agreed to share
the profits and loses proportionally to their contributed capital. Since they contributed equal capital, they
will be receiving 1/3 of the amount balance in the equity after deducting all the companys obligations to
outside party.