THE CRIMSON GROUP, INC.
CONSULTING AND LEADERSHIP TRAINING IN HEALTH CARE
Home Programs Faculty Research Curriculum Center Public Resources My Account
Member Sign In
Shopping Cart  
My Account
My E-Packets
Browse Bibliography:
By Keywords:
 

By Type:
New/Updated Items
Popular Items
Cases
Background Notes
Primers and Books

By Functional Area:
Finance/Financial Management
Financial Accounting
Financial Analysis and Management
General Management
Management Accounting
Management Control Systems
Marketing
Operations Management
Organizational Behavior

By Setting:
Developing Country
For Profit
Health Policy
Healthcare Management
Nonprofit
Nonprofit Organization Management
Public Sector Management

Curriculum Center Browse Bibliography Build EPacket Pricing Structure Distribution Process Management Control in Nonprofit Organizations
 
Management Development, Inc.
Author(s):
Young, David W.
Functional Area(s):
   Financial Accounting
Setting(s):
   For Profit
Difficulty Level: Beginner
Pages: 2
Teaching Note: Available. 
Copyright Clearance Fee:  $9.00  Sign in to find out if you are eligible for an Academic Price of $5.00 
Add Item to a new E-Packet

Add To Cart

Order an Free Inspection Copy

Back to Bibliography
First Page and the Assignment Questions:

Management Development, Inc. (MDI) was a small consulting company that conducted workshops and conferences designed to further the state of the art of management in the corporate sector. It also published a newsletter several times a year describing its activities and containing several short essays on management techniques.

MDI had been in existence for over a decade. Its balance sheet as of December 31, 2001 is shown in Exhibit 1. During 2002, the following events occurred:

  1. Members were billed a total of $130,000 for their annual membership fees.
  2. The accounts receivable that were due at the end of 2001 were collected during 2002.
  3. The accrued salaries and wages that were owed at the end of 2001 were paid in 2002.
  4. Members paid a total of $120,000; therefore, as of December 31, 2002, $10,000 in fees were still owed.
  5. Salaries and wages totaling $90,000 were earned by employees. Of this amount, $82,500 had been paid in cash. Payday was the first Friday of each month, however. Therefore as of December 2002, $7,500 in salaries and wages for the month of December, although earned, had not yet been paid. Payment would not be made until January 2003.
  6. Depreciation in 2001 had totaled $5,500. This amount was expected to continue in 2002.
  7. In addition, a new microcomputer was purchased in early January 2002 for a total cost, delivered and installed of $8,000, which was paid in cash. It was expected to have a useful life of 5 years, at the end of which it could be sold for $1,000.
  8. Administrative and general expenses of $18,000 were incurred and paid during the year.
  9. Purchases of inventory (mainly publications but also office supplies) totaling $12,000 were made in cash during the year. At the end of the year, a physical inventory count showed that the inventory totaled $4,500.
  10. MDI was in a 40 percent tax bracket. . . .

Assignment

  1. Set up T accounts (including those for the income statement) and make the appropriate entries to them.
  2. Perform the closing process.
  3. Prepare a balance sheet as of December 31, 2002, and an income statement for 2002.
  4. What is your assessment of the financial condition of the MDI? What additional information would you like to have?