Diane Maynard made the following request of a friend:
My 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 $19,635.
1. Prepare balance sheets as of June 1 and as of June 30, in proper format.
2. Make comments about how the financial condition 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 Company is worth the amount in Shareholder's Equity, $619,446? Explain.

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EXHIBIT 1 Account Balances June 1 June 30 Accounts payable Accounts receivable Accrued wages payable Accumulated depreciation on building Accumulated depreciation on equipment Bank notes payable Building Capital stock Cash Equipment (at cost) Land Merchandise inventory Note receivable, Diane Maynard Other noncurrent assets Other noncurrent liabilities Prepaid insurance Retained earnings Supplies on hand Taxes payable $ 8,517 21,798 1,974 156,000 5,304 8,385 585,000 390,000 34,983 13,260 89,700 29,835 11,700 4,857 2,451 3,150 221,511 5,559 5,700 21,315 26,505 2,202 157,950 5,928 29,250 585,000 390,000 66,660 36,660 89,700 26,520 5,265 2,451 2,826 229,446 6,630 7,224