Diane Maynard made the following request of a friend?

Mv bookkeeper has quit, and I need to see the balance sheets of my company. He has left behind a book with the numbers already entered in it. Would you be willing to prepare balance sheets for me? Also, any comments you care to make about the numbers would be appreciated. The Cash account is healthy,which is a good sign, and he has told me that the net income in June was$l 9,635.

The book contained a detailed record of transac-Tions, and from it the friend was able to copy offthe balances at the beginning of the month and at the end of the month as shown in Exhibit 1, Diane Mav-nard owned al l the stock of Maynard Company. At the end of June, Diane Maynard paid herself an $11,700 dividend and used the money to repay hei loan from the company.

EXHIBIT 1 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, Diane Maynard	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

1. Prepare balance sheets as of June 1 and as of June 30, in proper format.

2. Make comments about how the financial condi- tion as of the end of June compared with that at

the beginning of June.

3. Why do retained earnings not increase by the amount of June net income?

4. As of June 30, do you feel that Maynard Com-paw is worth the amount in Shareholder'S Equity, $619,4467 Explain.