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Questions:
1. What are the Accounting Principles behind this case?
2. Give conclusions and recommendation in this case.
Maynard Company (B) Diane Maynard was grateful for the balance sheets/Statement of Financial Position (per Case 2, Maynard Company A) that her friend prepared.
In going over the numbers, she remarked, "it's sort of surprising that cash increased by P31,677, but net income was only P19,635. Why was that?" Her friend replied, "A partial answer to that question is to look at an income statement for June. I think I can find the data I need to prepare one for you."
In addition to the data given in Case 2 (Maynard Company A), her friend found a record of cash receipts and disbursements, which is summarized in Exhibit 1. She also learned that all accounts payable were to vendors for purchase of merchandise inventory and that cost of sales was P39,345 in June.
Existing shareholders:
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