CASE STUDY

ON
LONE PINE
CAFE

Prepared by:Vishwas kariya

Adiya kolambkar
Dinesh parmar
Brijesh chavda
Ravi sutariya

Introduction:

Mrs. and Mr. Antoine and Mrs. Landers

formed a partnership.

Each contributed $16000 cash on

November 1 2009.

The Antoines contributed there savings

whereas Mrs. Landers all proceeds of her
late husband.

Signed a 1 year lease to lone pine caf,

monthly rent was $1500.

Took a loan of $21000 from local bank.

Bought equipment worth $53200 and $2800

for food and beverages.

Paid annual license fees of 1428 starting

NOVEMBER 1 2009.

Bought a new cash register worth $1400 on

CASH.

Shortly after November 1, the restaurant

was opened.

Mr. Antoine was cook, Mrs. Antoine and Mrs.

Landers waited, Mrs. Antoine was also
responsible for food, beverages and
supplies, operated the cash register.

Q1- Balance sheet Information:

On november 2, they had a Loan

outstanding of $21000 from a local bank,
each partner was physically present and
working in caf.

They bought equipment worth $53200, cash

register worth $1400, Food and beverages
worth 2800, all amounting to Assets for
November 2 2009.

They paid fees of $1428, starting November

1 2009, which will be accounted to prepaid
expense as services for the period have not
been used.

Cash in bank: They had total $69000, paid

in cash were equipment, cash register,
foods and beverages and license fees.

so 69000(53200+1400+2800+1428)=10172 (cash)

Balance Sheet
on November 2 2009.
LIABILITIES
Capital

Amt
.
48000

Mr. Henry Antoine 16000

Mrs. Henry Antoine 16000
Mrs. Sandra Landers 16000

Bank loan

ASSETS
Fixed assets
Equipment

21000

53200

Current assets, loans

& advances
Food and beverages
Checking A/c
Prepaid license fees
Cash Register

69000

Amt
.

2800
10172
1428
1400
6900
0

Turning Point:

Restaurant operated through winter of

2009-2010, was not successful.

Morning of March 31 2010, Mrs. Antoine

discovers his husband and Mrs. Landers are
missing.

Mrs. Landers took her every belonging

whereas Mr. Antoine had left behind most of
his clothing.

They took cash register and all the cash it

had.

Mrs. Antoine continued operating Lone pine

Caf, she asked Donald Simpson to make
accounting statement on March 30 2010.

Accouinting information:

Mrs. Antoine said that cash register had

$311

Checking account had $1030, plus ski

instructors 870. so cash amounting $1900.

Mr. Antoine left articles worth $750, it is

not related to Lone Pine caf as it is
personal entity and according to BUSINESS
ENTITY CONCEPT.

Caf owed $1583 to supplier.

So it will be a LIABALITY and will be CREDIT

to CREDITOR account.

Food and beverages were estimated to be

$2430

This will be DEBIT to closing stock, an ASSET.

Partnership paid $2100 of the loan.

Loan account will be DEBIT $2100.

Mrs. Antoine estimated depreciation of

$2445 on Machinery.

This will be credit to Machinery account.

So value of Machinery will be decreased.

Working Notes:1)Unsecured loan as on 31.3.2010

opening amt.
= 21000
(-) amt. Repaid = 2100
o/s amt.
= 18900
2)Prepaid license fees as on 31.3.2010
Amount payable per years is Rs 1428 as on 1st
November.
(-) Amount expired on 31.3.2010 = 1428/12*5
=
= 595
Amount o/s on 31.3.2010
= 833

3) The amount of Capital as on 31.3.10 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
1711
To cash
311
To cash register 1400
The ski instructors who owed Rs 870 paid
subsequently, so cash balance is Rs 870

Q2: Balance sheet on March 30

2010.
LIABILITIES
Capital

Amt
.

Bank loan

35434
18900

Creditors and provisions

Creditors

1583

55918

Amt.

Fixed assets
Equipment

Mr. Henry Antoine 11811

Mrs. Henry Antoine 11811
Mrs. Sandra Landers 11812

ASSETS
53200

(-)depreciation 2445

50755

Current assets,
loans & advances
Cash
Checking A/c
Food and beverages

870
1030
2430

Prepaid license fees

833
55918

Q3 Disregarding the marital

complications, do you suppose
that the partners would have
been
able
to
receive
their
proportional share of the equity
determined
in
Q-2
if
the
partnership was dissolved on
march 30, 2010? Why?

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.

Thank You