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The Lone Pine Café

Eugene Baroña

 Abelardo Bea Jr.

Roe Ann Comendador 

Glenn Joseph Rillo

September 28, 2013

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Case Personalities

Mr. and Mrs. Henry Antoine

Mrs. Sandra Landers

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Case Summary

• A Business partnership between Mr. and Mrs. HenryAntoine and Mrs. Sandra Landers

• Leased Lone Pine Café for one year and bought out

from previous operator

• The café is located in a nearby recreational area• Business financed through partnership funds and bank

loan

• Opened shortly after November 1, 2009

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Case Summary

• Mr. Antoine took charge of the kitchen while the 2ladies waited for the customers

• Mrs. Antoine ordered F&B, supplies, operated cash

register, and maintained the checking account

• Unsuccessful operation all throughout winter 2009-2010

• Disappearance of Mr. Henry Antoine and Mrs. Sandra

Landers on the morning of March 31, 2010

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Case Summary

•

Missing business/partnership assets• Court affirmation on dissolution of partnership effective

March 30, 2010

• Mrs. Landers decided to continue operating the

business• Donald Simpson, an accountant to assist Mrs. Antoine

create a balance sheet

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Problem Identification

Given the dissolution of the business

partnership, how should the owners of Lone

Pine Café distribute the total equity as of March 30?

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Relevant Case FactsAs of November 1, 2009: 

• A total of $48,000 capital was infused to start the business with equalcontribution from each

• One year lease contract to Lone Pine Café

• Monthly rental cost of $1,500

• Bought out café from previous owner through

Bank Loan of $21,000 Utilization of $35,000 from partnership funds

• $53,200 worth of equipment financed through loan and partnership funds

• $2,800 worth of F&B inventory also financed the same way

• $1,428 paid for local licenses good for 1 year beginning November 1, 2009

• $1,400 spent on new cash register

• $8,672 deposited on current account

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Current Assets Current Liabilities

Cash, checking acct 8,672.00 Notes Payable 21,000.00

Prepaid Rent 1,500.00 Total Current Liabilities 21,000.00

Prepaid License 1,428.00

Inventory, F&B 2,800.00

Total Current Assets 14,400.00 Mr. Antoine 16,000.00Mrs. Antoine 16,000.00

Non Current Assets Mrs. Landers 16,000.00

Equipments 53,200.00 Total Owners' Equity 48,000.00

Cash Register 1,400.00

Total Non Current Assets 54,600.00

Total Assets 69,000.00 Total Liabilities and OE 69,000.00

STATEMENT OF FINANCIAL POSITION

The Lone Pine Caf é

ao November 1, 2009

Assets Liabilities

Owners' Equity

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Relevant Case Facts

As of March 30, 2010: •Cash register contained $311

•Checking account balance is at $1,030

•Meals charged and paid by Ski instructors amounting to $870

•Due amount to suppliers totaling to $1,583

•Asset depreciation value of $2,445•F&B inventory amounting to 2,430

•Loan repayment of $2,100

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Scenario 1

Current Assets Current Liabilities

Cash, checking acct and receipts 1,900.00 Notes Payable 18,900.00

Prepaid License 833.00 Accounts Payable 1,583.00

Inventory, F&B 2,430.00 Total Current Liabilities 20,483.00 Total Current Assets 5,163.00

Non Current Assets Mr. Antoine 11,811.67

Equipments 53,200.00 Mrs. Antoine 11,811.67

Less: Depreciation (2,445.00) Mrs. Landers 11,811.67

Total Non Current Assets 50,755.00 Total Owners' Equity 35,435.00

Total Assets 55,918.00 Total Liabilities and OE 55,918.00

Owners' Equity

The Lone Pine Caf é

ao March 30, 2010

STATEMENT OF FINANCIAL POSITION

Assets Liabilities

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Scenario 2

Current Assets Current Liabilities

Cash, checking acct and receipts 1,900.00 Notes Payable 18,900.00

Cash, cash register Accounts Payable 1,583.00

Prepaid License 833.00 Total Current Liabilities 20,483.00 Inventory, F&B 2,430.00

Total Current Assets 5,163.00

Mr. Antoine 12,382.00

Non Current Assets Withdrawal, Mr Antoine (855.50)

Cash reg Mrs. Antoine 12,382.00

Equipment 53,200.00 Mrs. Landers 12,382.00

Less: Depreciation (2,445.00) Withdrawal, Mrs Landers (855.50) Total Non Current Assets 50,755.00 Total Owners' Equity 35,435.00

Total Assets 55,918.00 Total Liabilities and OE 55,918.00

Owners' Equity

STATEMENT OF FINANCIAL POSITION

The Lone Pine Caf é

ao March 30, 2010

Assets Liabilities

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“A dissolution of a partnership generally occurs when one of the

 partners ceases to be a partner in the firm…”  

http://legal-dictionary.thefreedictionary.com/partnership

Even without the marital complications, the

partners are still entitled to receive aproportional share of their equity.

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Thank you!