Maynard--Balance Sheet
Diane has made the following request.
The bookkeeper has quit, and I need to see the balance sheets of my company. He left behind a book with the numbers already entered in the accounts. Would you be willing to prepare a balance sheet? Any comments you might care to make about the financial condition of my company would be appreciated. The Cash account appears to be healthy and the bookkeeper left a note indicating that net income for the month was $19,635.
After perusing the book you find that the book provided beginning and ending balances for the month of June. These numbers are summarized in the table below. Diane indicated that she is the sole owner of the company.
Required: Prepare balance sheets as of June 1 and as of June 30, in proper format. Comment on the financial condition of the firm on June 30 and compare it with the condition indicated on June 1. Why did retained earnings not increase by the amount of June net income?
Account Balances |
||
June 1 |
June 30 |
|
| Accounts Payable | 8,517 |
21,315 |
| Accounts Receivable | 21,798 |
26,505 |
| Accrued wages payable | 1,974 |
2,202 |
| Accumulated depreciation on building | 156,000 |
157,950 |
| Accumulated depreciation on equipment | 5,304 |
5,928 |
| Bank notes payable | 8,385 |
29,250 |
| Building | 585,000 |
585,000 |
| Capital Stock | 390,000 |
390,000 |
| Cash | 34,983 |
66,660 |
| Equipment (at cost) | 13,260 |
36,660 |
| Land | 89,700 |
89,700 |
| Merchandise Inventory | 29,835 |
26,520 |
| Note receivable--0wner | 11,700 |
0 |
| Other noncurrent assets | 4,857 |
5,265 |
| Other noncurrent liabilities | 2,451 |
2,451 |
| Prepaid insurance | 3,150 |
2,826 |
| Retained Earnings | 221,511 |
229,446 |
| Supplies on hand | 5,559 |
6,630 |
| Taxes payable | 5,700 |
7,224 |