Maynard Company

CASE REPORT 4
 1. Prepare balance sheets as of June 1
and as of June 30, in proper format.
Balance Sheet as on June 1 Balance Sheet as on June 30
Amount
Liabilities Amount ($) Assets Amount ($)
Liabilities Amount ($) Assets ($)
Capital Stock 390000 Land 89700 Capital Stock 390000 Land 89700
Other Non-current Building Building
liabilities 2451 585000 Other Non-current liabilities 2451 585000

Accounts Payable 8517 Less:Depreciation 248960 336040

Accounts Payable 21315 Less:Depreciation 287680 297320
Wages Payable 1974 Equipment 13260 Equipment
Wages Payable 2202 36660
Bank Notes Payable 8385 Less:Depreciation 6804 6456
Tax Payable 5700 Merchandise Inventory 29835 Bank Notes Payable 29250 Less:Depreciation 7325 29335
Retained Earnings 127051 Supplies on hand 5559 Tax Payable 7224 Merchandise Inventory 26520

Other non-current assets 4857 Retained Earnings 98319 Supplies on hand 6630
Pre-paid insurance 3150 Other non-current assets 5265
Cash 34983 Pre-paid insurance 2826
Accounts Receivable 21798 Cash 66660
Notes receivable (Diane
Accounts Receivable 26505
Maynard) 11700
544078 544078 550761 550761
2. Make comments about how the financial
condition as of the end of June compared
with that at the beginning of June.
 Comparing the balance sheets of the 1st of June with that of the 30th of June,
it can be seen that there was purchase of equipment. This improved the
output of the company, and hence the sales and revenues. As a result, the
stock in hand decreased, the cash balance and accounts receivable increased
and the taxes to be paid went up. Even so, there is a considerable amount
owed to the creditors of the business.
 The equipment seem to have been bought on loan as we can see an increase
in the bank notes payable. The notes receivable from Diane Maynard was
completely paid off by her by June 30th using the cash she took out as
dividend.
3. Why do retained earnings not increase by
the amount of June net income?

 Even though the company benefitted from a net income of $19,635, it does
not show in the retained earnings as Diane Maynard paid herself a dividend of
$11,700 and the remaining difference of $36,667 seems to have been
transferred to the cash account.
 Remaining Cash difference = Retained Earnings (June 1) + Net income –
Retained earnings (June 30) – Dividends paid to Maynard
= $127051 + $19635 - $98319 -$11700 = $36,667
4. As of June 30, do you feel that Maynard
Company is worth the amount in
Shareholder’s Equity, $619,446? Explain.
 Shareholders equity implies the company’s net worth. Here we can see that
Maynard Company has an equity share capital worth $488319 as on June 30th,
therefore we can conclude that the company is not worth $619446.
THANK YOU

Prepared by,

Group A
Sukanya T.
Nivin Vinoi
Tomin Baby
Joseph Philip
Deepu Jacob