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Case 2-
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Music
Case 2-1
On a shee
Maynard Company (A)* of Music l
tion descr
Diane Maynard made the following request of a owned all the stock of Maynard Company. At the end erable spa
friend: of June, Diane Maynard paid herself an $ I I ,700 divi- any, of thr
dend and used the money to repay her loan from the ther by re''
My bookkeeper has quit, and I need to see the balance
company. erase) or
sheets of my company. He has left behind a book with
the numbers already entered in it. Would you be will- one of the
ing to prspare balance sheets for me? Also, any com- Questions The basic
ments you care to make about the numbers would be equity, rnr
appreciated. The Cash account is healthy, which is a 1. Prepare balance sheets as of June 1 and as of June minimizer
good sign, and he has told me that the net income in 30, in proper format sheet iter
June was $ 19,635. 2. Make comments about how the financial condition amount (l
The book contained & detailed record of transac- as of the end of June compared with that at the be- After y
tions, and from it the friend was able to copy off the ginning of June. ance sheet
balances at the beginning of the month and at the end 3. Why do retained earnings not increase by the actions o(
of the month as shown in Exhibit 1. Diane Maynard amount of June net income? other tranr
4. As of June 30, do you feel that Maynard Company 1. The sr