case-2-3
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Case 2-3: Lone Pine Café
1. Prepare a balance sheet for the Lone Pine Café as of November 2, 2009
LONE PINE CAFÉ Balance Sheet
As of November 2, 2009
ASSETSCurrent AssetsCash [$69000-($53200+2800+1428+1400)] $10,172.00Food and Beverages 2,800.00Prepaid Expense (Operating Licenses) 1,428.00Total Current Assets 14,400.00
Fixed AssetsEquipment $53,200.00Cash Register 1,400.00Total Fixed Assets 54,600.00
Total Assets $69.000.00
LIABILITIESNotes Payable (Bank Loan) $21,000.00
EQUITYCapital, Beginning $48,000.00
Mr. Henry Antoine $16,000.00Mrs. Henry Antoine 16,000.00Mrs. Sandra Landers 16,000.00
Total Liabilities and Equity $69,000.00
Submitted By: Lynnard Philip L. PanesMMBM II
2. Prepare a Balance Sheet as of March 30, 2010
. LONE PINE CAFÉ Balance Sheet
As of March 30, 2010
ASSETSCurrent AssetsCash $ 1,341.00Accounts Receivable 870.00Food and Beverages 2,430.00Prepaid Expense [$1428-($1428/12 x 5)] __833.00Total Current Assets 5,474.00
Fixed AssetsEquipment $54,600.00Less: Depreciation (2,445.00)Total Fixed Assets 52,155.00
Total Assets $57,629.00
LIABILITIESNotes Payable ($21,000 - $2,100) $18,900.00Accounts Payable 1,538.00
Total Liabilities $20,438.00
EQUITY*Capital, Beginning $35,480.00Mr. Henry Antoine $12.397.00Mrs. Henry Antoine 12.397.00Mrs. Sandra Landers 12.397.00
Total Liabilities and Equity $57,629.00
3. Disregarding the marital complications, do you suppose that the partners would have been able to receive their proportional share of the equity determined in Question 2 if the partnership was dissolved on March 30, 2010? Why?
Yes, the partners would have received their proportional share of equity.
Since the time the partnership was formed, the three partners agreed to share in the profits (and losses) proportionally to their contributed capital.
It has been determined that the restaurant was not very successful so it is possible that the partnership was also running into losses. In liquidation, there might not be enough cash to pay the above liabilities.
Submitted By: Lynnard Philip L. PanesMMBM II