THE CASE OF LONE PINE CAFÉ

Ryan Chu Michelle Saquido Vanessa Pabuhat John Patrick Perez

Ryan Chu Michelle Saquido John Patrick Perez Vanessa Pabuhat

PART 1:
THE STORY
OBJECTIVES

CASE ANALYSIS

A

BY: Ryan Chu and Michelle Saquido

Henry Antoine and Mrs.I. and Mrs.  Nov 1. 2009 – they contributed cash and agreed to share in the profits proportionally to their contribution.  The Antoines contributed all of their savings. Sandra Landers formed a partnership. Landers from the proceeds of her late husband’s insurance policy. THE STORY  Mr. while Mrs. .

Landers had disappeared. . 2010 – Mrs.I. Antoine discovered that Mr. Antoine left some of his clothes and Mrs. Landers took all her possessions.  Mar 31. Antoine and Mrs.  Mr. But it was not successful. THE STORY  They opened the restaurant shortly after. in the winter of 2009-2010. The cash register and its contents were also missing.

 Mrs. She realized that an accounting would have to be made at the end of March 2010. Antoine asked Mr. Antoine decides to continue operating the cafe.  Mrs. to assist her with the accounting. THE STORY  Mrs. Antoine concluded that the partnership was dissolved and the court subsequently affirmed of its dissolution.I. . Donald Simpson. a friend.

2010.II.  To prepare a balance sheet for Lone Pine Cafe as of March 30.  To determine if the partners would have been able to receive their proportional share of the equity if the company is dissolved in March 30. OBJECTIVES  To prepare a balance sheet for Lone Pine Cafe as of November 2. 2009. 2010. Why? .

2009)  Prepare a Balance Sheet for Lone Pine Cafe as of November 2.III. Plant and Equipment Equipment Liabilities Notes Payable 10172 2800 1428 21000 14400 Owners’ Equity Mr. Capital Total Liabilities and Owners’ Equity 16000 16000 16000 54600 Total Assets: 69000 69000 . Capital Mrs. Antoine. Lone Pine Café Statement of Financial Position As of November 2. 2009. BALANCE SHEET AS OF NOV 2. Landers. Antoine. 2009 Assets Current Assets Cash Inventory Prepaid Expense Total Current Assets: Property. CASE ANALYSIS (A. Capital Mrs.

Capital Mrs. Capital Mrs.III. Antoine. 2009)  Nov 1: Each of the three partners contributed 16000 cash to the partnership and agreed to share in the profits proportionally to their contributed capital. Antoine. Landers. Cash 48000 Mr. Capital 16000 16000 16000 . CASE ANALYSIS (A. BALANCE SHEET AS OF NOV 2.

The monthly rent on the cafe was 1500. . located in a nearby recreational area. 2009)  Nov 1: The partnership signed a one-year lease to the Lone Pine Cafe. BALANCE SHEET AS OF NOV 2.III. CASE ANALYSIS (A.

Of this amount 53200 was for equipment and 2800 was for the food and beverages then on hand. CASE ANALYSIS (A.III. 2009)  The partners borrowed 21000 from a local bank and used this plus 35000 of partnership funds to buy out the previous operator of the cafe. Cash 21000 Notes Payable 21000 Equipment Inventory Cash 53200 2800 56000 . BALANCE SHEET AS OF NOV 2.

CASE ANALYSIS (A.III. 2009)  The partnership paid 1428 for local operating expense. good for one year beginning November 1. Prepaid Expense Cash 1428 1428 . BALANCE SHEET AS OF NOV 2.

III. BALANCE SHEET AS OF NOV 2. Equipment Cash 1400 1400 . 2009)  The partnership paid 1400 for a new cash register. CASE ANALYSIS (A.

IV. Landers. Capital Total Liabilities and Owners’ Equity 16000 16000 16000 54600 Total Assets: 69000 69000 . 2009. 2009)  Prepare a Balance Sheet for Lone Pine Cafe as of November 2. Capital Mrs. CASE ANALYSIS (A. 2009 Assets Current Assets Cash Inventory Prepaid Expense Total Current Assets: Property. Antoine. Lone Pine Café Statement of Financial Position As of November 2. Capital Mrs. Antoine. BALANCE SHEET AS OF NOV 2. Plant and Equipment Equipment Liabilities Notes Payable 10172 2800 1428 21000 14400 Owners’ Equity Mr.

C SUMMARY BY: Vanessa Pabuhat and John Patrick Perez .PART 2: CASE ANALYSIS B.

IV.50) 35435 55918 Total Assets: 55918 . 2010. 2010)  Prepare a Balance Sheet for Lone Pine Cafe as of March 30. Capital Mrs. Withdrawal Mrs. Capital Mrs. 2010 Assets Current Assets Cash Inventory Prepaid Expense Total Current Assets: Non Current Assets Equipment Less: Accumulated Depreciation Liabilities Accounts Payable Notes Payable Total Liabilities 5163 Owners’ Equity Mr. CASE ANALYSIS (B. Antoine. Lone Pine Café Statement of Financial Position As of March 30. Landers. BALANCE SHEET AS OF MARCH 30. Withdrawal Total Liabilities and Owners’ Equity 1583 18900 20483 1900 2430 833 53200 (2445) 50755 12382 12382 12382 (855. Antoine.50) (855. Landers. Antoine. Capital Mr.

50 Mrs. Landers.50 . Antoine and Mrs. Antoine. Withdrawals = 855. The cash register had contained 311. BALANCE SHEET AS OF MARCH 30. Along with Mr. CASE ANALYSIS (B. Withdrawals = 855. Landers.III. 2010)  The new cash register and its contents were also missing. Equipment = 54600 – 1400 Equipment = 53200 Total loss = 1400 cash register + 311 cash Mr.

BALANCE SHEET AS OF MARCH 30. CASE ANALYSIS (B.III. These accounts subsequently were paid in full. Ski instructors who were allowed to charge their meals had run up accounts totaling to 870. Cash = 1030 + 870 Cash = 1900 . 2010)  The checking account balance was 1030.

III. Accounts Payable = 1583 . 2010)  The Lone Pine cafe owed suppliers amounts totaling 1583. CASE ANALYSIS (B. BALANCE SHEET AS OF MARCH 30.

BALANCE SHEET AS OF MARCH 30. Equipment Less: Accumulated Depreciation Book Value: 53200 (2445) 50755 .III. 2010)  Mr. CASE ANALYSIS (B. Simpson estimated that depreciation on assets amounted to 2445.

2010)  Food and beverages on hand were estimated to be worth 2430. BALANCE SHEET AS OF MARCH 30.III. CASE ANALYSIS (B. Inventory = 2430 .

the partners drew salaries at agreed upon amounts. and these payments were up to date. CASE ANALYSIS (B. 2010)  During the period of its operations. Antoine left behind was estimated to be worth 750.III. . BALANCE SHEET AS OF MARCH 30.  The clothing that Mr.

BALANCE SHEET AS OF MARCH 30. CASE ANALYSIS (B. 2010)  The partnership had also repaid 2100 of the bank loan.2100 Notes Payable = 18900 . Notes Payable = 21000 .III.

2010)  Prepaid Expense. Thus. BALANCE SHEET AS OF MARCH 30. CASE ANALYSIS (B. Prepaid Expense = 1428 – (119 x 5 months) Prepaid Expense = 1428 – 595 Prepaid Expense = 833 . an amount of $595 must be subtracted to the Prepaid Expense account. The local operating expense has been used up for 5 months.III.

CASE ANALYSIS (B. subtract the amounts that it owed to outside parties. 2010. Each partner would be entitled to one third of this amount. Simpson explained that in order to account for partner's equity. He would list the items that the partner owned as of March 30. 2010)  Mr. .IV. and the balance would be the equity of the three partners. BALANCE SHEET AS OF MARCH 30. he would prepare a balance sheet.

Antoine. BALANCE SHEET AS OF MARCH 30. Lone Pine Café Statement of Financial Position As of March 30. 2010)  Prepare a Balance Sheet for Lone Pine Cafe as of March 30.50) 35435 55918 Total Assets: 55918 . Landers.IV.50) (855. 2010 Assets Current Assets Cash Inventory Prepaid Expense Total Current Assets: Non Current Assets Equipment Less: Accumulated Depreciation Liabilities Accounts Payable Notes Payable Total Liabilities 5163 Owners’ Equity Mr. Landers. Antoine. Capital Mrs. Withdrawal Total Liabilities and Owners’ Equity 1583 18900 20483 1900 2430 833 53200 (2445) 50755 12382 12382 12382 (855. Antoine. Withdrawal Mrs. Capital Mrs. CASE ANALYSIS (B. 2010. Capital Mr.

III. do you suppose that the partners would have been able to receive the proportional share of the equity determined in Question 2 if the partnership was dissolved on March 30. CASE ANALYSIS (C)  Disregarding the marital complications. 2010? Why? .

2009 having the three partners invested equally in agreement of equal shares in the equity. the partnership that have been organized to operate the Lone Pine Cafe was dissolved under unusual circumstances.  We prepared a balance sheet as of November 1.IV. SUMMARY On March 31. and in connection to its dissolution.  . a balance sheet became necessary. 2010.

Shortly after starting the restaurant.  We also prepared a balance sheet as of March 30. they found that the business was not going well. SUMMARY At the time the partners also signed a one-year lease to Lone Pine Cafe. Landers went missing along with the partnership's cash register and its contents. bought equipment and supplies inventory from their investments and bank loans. Antoine found out that her husband and Mrs.  .IV. The partnership was dissolved. 2010 after Mrs.

SUMMARY  We found in the balance sheet that:  The partnership would not have been able to receive their proportional shares of the equity. .IV.

V. QUESTIONS .

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