Case 3-1 Maynard Company B*
Master in Business Administration Program
School of Business and Management
Xavier University - Ateneo de Cagayan
Cagayan de Oro City
Case No. 3-1 MAYNARD COMPANY (B)*
I. VIEWPOINT
Friend, Diane Maynard
II. STATEMENT OF THE PROBLEM
1. How to prepare an Income Statement in a proper form for June and explain the derivation of each item including Cost of Sales?
2. Why is the change in Cash balance greater than the Net Income? 3. Why the following amounts are incorrect Cost of Sales for June and what circumstances would it be a correct Cost of Sales? a) $ 14,715 b) $ 36,030
III. OBJECTIVE 1. To be able to present in proper form the Income Statement for June and explain derivation of each item including Cost of Sales. 2. To be able to know why changes in Cash balance greater than the Net Income. 3. To be able to know when $14,715 and $36,030 be a correct and incorrect amounts for Cost of Sales.
IV. AREAS OF CONSIDERATION Cash increased by $31,677 but Net Income was only $19,635. Balance Sheets were prepared in Case 2-1 Maynard Company (A)* as of June 01 and June 30 and the Statement of Cash Flow. Record of Cash Receipts and Cash Disbursements summarized in Exhibit 1. All Accounts Payable were to vendors for purchase of Merchandise Inventory. Cost of Sales equal $39,345 for June.
V. ALTERNATIVE COURSE OF ACTION A. Prepare in proper form Income Statement for June, Statement of Cash Flow and Statement of Cost of Sales.
Employ Ratio Analysis to further see the health condition of the Company.
VI. CONCLUSIONS AND RECOMMENDATIONS The only option open is Plan A. The Gross Margin of 48.75% indicates a reasonably good margin on the business, but Diane Maynard must gather
School of Business and Management
Xavier University - Ateneo de Cagayan
Cagayan de Oro City
Case No. 3-1 MAYNARD COMPANY (B)*
I. VIEWPOINT
Friend, Diane Maynard
II. STATEMENT OF THE PROBLEM
1. How to prepare an Income Statement in a proper form for June and explain the derivation of each item including Cost of Sales?
2. Why is the change in Cash balance greater than the Net Income? 3. Why the following amounts are incorrect Cost of Sales for June and what circumstances would it be a correct Cost of Sales? a) $ 14,715 b) $ 36,030
III. OBJECTIVE 1. To be able to present in proper form the Income Statement for June and explain derivation of each item including Cost of Sales. 2. To be able to know why changes in Cash balance greater than the Net Income. 3. To be able to know when $14,715 and $36,030 be a correct and incorrect amounts for Cost of Sales.
IV. AREAS OF CONSIDERATION Cash increased by $31,677 but Net Income was only $19,635. Balance Sheets were prepared in Case 2-1 Maynard Company (A)* as of June 01 and June 30 and the Statement of Cash Flow. Record of Cash Receipts and Cash Disbursements summarized in Exhibit 1. All Accounts Payable were to vendors for purchase of Merchandise Inventory. Cost of Sales equal $39,345 for June.
V. ALTERNATIVE COURSE OF ACTION A. Prepare in proper form Income Statement for June, Statement of Cash Flow and Statement of Cost of Sales.
Employ Ratio Analysis to further see the health condition of the Company.
VI. CONCLUSIONS AND RECOMMENDATIONS The only option open is Plan A. The Gross Margin of 48.75% indicates a reasonably good margin on the business, but Diane Maynard must gather