Medieval Adventure Company

Balance Sheet
As of December 31
Assets Equities
Cash 146,250 Common Stock 250,000
Accounts Receivable 68,750 Retained Earnings -
Inventory 35,000

250,000 250,000

Medieval Adventure Company

Balance Sheet
As of January 31
Assets Equities
Cash 111,250 Common Stock 250,000
Accounts Receivable 96,250 Retained Earnings 10,000
Inventory 52,500

260,000 260,000

Medieval Adventure Company

Balance Sheet
As of February 28
Assets Equities
Cash 72,500 Common Stock 250,000
Accounts Receivable 137,500 Retained Earnings 30,000
Inventory 70,000

280,000 280,000

Medieval Adventure Company

Balance Sheet
As of March 31
Assets Equities
Cash 30,000 Common Stock 250,000
Accounts Receivable 192,500 Retained Earnings 60,000
Inventory 87,500

310,000 310,000

Medieval Adventure Company

Balance Sheet
As of April 30
Assets Equities
Cash - Common Stock 250,000
Accounts Receivable 247,500 Retained Earnings 100,000
Inventory 105,000
Bank Loan 2,500
352,500 352,500

Medieval Adventure Company

Balance Sheet
As of May 31
Assets Equities
Cash - Common Stock 250,000
Accounts Receivable 302,500 Retained Earnings 150,000
Inventory 122,500
Bank Loan 25,000
425,000 425,000

Medieval Adventure Company

Balance Sheet
As of June 30
Assets Equities
Cash - Common Stock 250,000
Accounts Receivable 357,500 Retained Earnings 210,000
Inventory 140,000
Bank Loan 37,500
497,500 497,500

Medieval Adventure Company

Balance Sheet
As of July 31
Assets Equities
Cash - Common Stock 250,000
Accounts Receivable 412,500 Retained Earnings 280,000
Inventory 157,500
Bank Loan 40,000
570,000 570,000
 Medieval Adventure Company
Income Statement
As of January 31
Units 1,000
Sales Revenue 55,000

Variable Costs (1,000 units) 35,000

Fixed Costs (Feb) 10,000

Net Income 10,000

Medieval Adventure Company

Income Statement
As of 28 February
Units 1,500
Sales Revenue 82,500

Variable Costs (1,000 units) 52,500

Fixed Costs 10,000

Net Income 20,000

Medieval Adventure Company

Income Statement
As of 31 March
Units 2,000
Sales Revenue 110,000

Variable Costs (1,000 units) 70,000

Fixed Costs 10,000

Net Income 30,000

Medieval Adventure Company

Income Statement
As of 30 April
Units 2,500
Sales Revenue 137,500

Variable Costs (1,000 units) 87,500

Fixed Costs 10,000

Net Income 40,000

 Medieval Adventure Company
Income Statement
As of 31 May
Units 3,000
Sales Revenue 165,000

Variable Costs (1,000 units) 105,000

Fixed Costs 10,000

Net Income 50,000

Medieval Adventure Company

Income Statement
As of 30 June
Units 3,500
Sales Revenue 192,500

Variable Costs (1,000 units) 122,500

Fixed Costs 10,000

Net Income 60,000

Medieval Adventure Company

Income Statement
As of 31 July
Units 4,000
Sales Revenue 220,000

Variable Costs (1,000 units) 140,000

Fixed Costs 10,000

Net Income 70,000

Medieval Adventure Company

Income Statement
As of 31 Aug
Units 4,500
Sales Revenue 247,500

Variable Costs (1,000 units) 157,500

Fixed Costs 10,000

Net Income 80,000

Medieval Adventure Company

Income Statement
As of 30 Sep
 Units 5,000
Sales Revenue 275,000

Variable Costs (1,000 units) 175,000

Fixed Costs 10,000

Net Income 90,000

 Nov Dec Jan Feb Mar Apr May
Units 500 750 1,000 1,500 2,000 2,500 3,000
Cash 146,250 111,250 72,500 30,000 -
Collections 27,500 41,250 55,000 82,500 110,000
Bank Loan 2,500 22,500
173,750 152,500 127,500 115,000 132,500

Costs 62,500 80,000 97,500 115,000 132,500

Variable 52,500 70,000 87,500 105,000 122,500
Fixed 10,000 10,000 10,000 10,000 10,000
Loans Paid
Cash (End) 111,250 72,500 30,000 - -

Start taking
loan (Total
$40,000) in
April

Why did this happen?

Credit sales payment terms (2 months)
Costs were growing faster than cash received (2 months late)

- #REF! #REF! #REF!

#REF! #REF! #REF! #REF!

-
 Jun Jul Aug Sep Oct Nov Dec
3,500 4,000 4,500 5,000 5,500 6,000 6,500 7000
- - - - - 12,500 50,000
137,500 165,000 192,500 220,000 247,500 275,000 302,500
12,500 2500
150,000 167,500 192,500 220,000 247,500 287,500 352,500

150,000 167,500 192,500 220,000 235,000 237,500 255,000

140,000 157,500 175,000 192,500 210,000 227,500 245,000
10,000 10,000 10,000 10,000 10,000 10,000 10000
7,500 17,500 15,000
- - - - 12,500 50,000 97,500

Loan can be
fully repaid
in October