Maynard Company CASE REPORT 4 1. Prepare balance Eas. i and as of June 30, in proper format. ees tesa) sos mane secant oe secant ope rovsieedepmcston uo 20 tm Pe yigee nesPonte an Table ‘aikegae ey 2s2. Make comments 2p RM, cit condition as of the end of June compared with that at the beginning of June. > Comparing the balance sheets of the 1* of June with that of the 30" 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 30° using the cash she took out as dividend, 3. Why do retained ETE ase 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 (une 30) - Dividends paid to Maynard = $127051 + $19635 - $98319 -511700 = $36,6674. As of June 30, do TM acc 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 30°, therefore we can conclude that the company is not worth $619446,