Case Study

Lone Pine Cafe.

Presented byPreety RateriaNipun GoelVenkat ramanT.KedarMahesh

Capital 48000 Mr. Henry Antoine 16000 Mrs. Henry Antoine 16000 Mrs. Sandra Landers 16000

Secured Loan nil

Unsecured Loan 21000

Creditors and provisions nil

Fixed assetsEquipment 53200

Investments nil

Current assets, loans & advancesFood and beverages 2800Checking A/c 10172Prepaid license fees 1428Cash Register 1400

69000 69000

Balance Sheet for the Lone Pine Cafe as of November 2, 2005.

Working notes:1) Unsecured loan as on 31.3.2006 opening amt. = 21000 (-) amt. Repaid = 2100 o/s amt. = 18900

2)Prepaid license fees as on 31.3.2006 Amount payable per years is Rs 1428 as on 1st

November. (-) Amount expired on 31.3.2006 = 1428/12*5 = 595 Amount o/s on 31.3.2006 = 833

3) The amount of Capital as on 31.3.06 is the balance figure and has been distributed among the partners in equal ratio.

4) The cash register and its contents were taken away : Loss by theft dr 1711 To cash 311 To cash register 1400

The ski instructors who owed Rs 870 paid subsequently, so cash balance is Rs 870

Capital (bal. figure) (note₃)

35435 Mr. Henry Antoine 11811 Mrs. Henry Antoine 11811 Mrs. Sandra Landers 11812

Secured Loan nil

Unsecured Loan(note₁) 18900 Creditors and provisions Creditors 1583

Fixed assetsEquipment 53200 (-)depreciation 2445 50755

Investments nil

Current assets, loans & advancesCash (note₄) 870Checking A/c 1030Food and beverages 2430

Prepaid license fees (note₂) 833

Miscellaneous expenses nil

55918

Balance Sheet for the Lone Pine Cafe as of March 30, 2006.

55918

If the Partnership was dissoved on 31.3.2006, disregarding the marital complications, the surplus left after selling the assets of the firm and paying of the liabilities amounted to Rs 34876 .

The partners would have been able to receive the same in proportion of there equity because in the event of dissolution of a partner-ship firm, the surplus realised is divided among the partners

Working note Food & beverages a/c

Bal. b/d 2800Creditors 1583Cash 10016

14399

Profit/loss (bal.fig) 11969Bal. c/d 2430

14399

Income Statement of Lone Pine Cafe for the year ended 30th March 2006

Sales 43480LessFood and beverages 11969Wages 5480Interest 540Telephone and electricity 3270Miscellaneous 255Rent 7500License 595 Depreciation 2445Loss by theft 1711Payment to partners 23150

Loss during the year (bal. Figure) (13435)

Income Statement of Lone Pine Cafe for the year ended 30th March 2006

Sales 43480LessExpenses 33765Profit 9715(-)Payment to partners 23150

Loss during the year (bal. Figure) (13435)

So it tells Mrs Antoine about the income position of the firm. And that the firm is running into losses if we consider the payments to the partners.But even if she was to carry on as a sole proprietory she will have to appoint managers and pay salary to the say. So it does not seem a good idea to carry on with the cafe.

THANK YOU !!!