Maria Hernandez & Associates

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Maria Hernandez & Associates

Prepared by

Ramon D. Gonzalez


Professor C.E. Reese

In partial fulfillment of the requirement for

ACC 770-Managerial Accounting

School of Business/ Graduate Studies

St. Thomas University

Miami Gardens, Fla.

Term A3/ Summer 2008

May 22, 2008

Table of Contents




I. Issues
1a. How Would you have reported on operations of Maria Hernandez & Associates through August 31, 2001? 1b. Had the company made a profit as Maria Hernandez believed? 1c. If so, how would you explain why the cash in the bank has declined? II. Facts

Maria is a graduate of the Massachusetts College of Art who worked to two companies specializing in the webpage designs. She worked as an employee for three years and was laid off twice. After experiencing the results of working for someone else, she decided it was time to make it on her own. With her abilities and confidence she decided to create a webpage design consultancy offering webpage designs to potential customers.

At start up on June 1, 2001 she opened a new account with her saving of $30,000 and her father lent her another $20,000. With this capital she rented an office and supplied with stationary and purchased computer equipment. Maria had $12,000 cash in the bank left over and some assets. Several days after getting off the ground she was working with two customers designing their webpage.

Around the middle of August she had four other designers working for her and business was continuing to pick up. With new employees working for her and business coming in she knew things were going well,...
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