Three individuals started the Lone Pine Café business by contributing $16,000 each and signing a one-year lease. They purchased equipment and supplies, and took out a $21,000 bank loan. After opening, one partner was responsible for cooking while the others managed customers. In March, two partners disappeared, forcing the business to close. The remaining partner provided financial information showing assets of $57,629 and liabilities of $20,483. If dissolved on the date of closure, the partners would have received their proportional share of equity despite relationship complications.

1. Case Analysis of Lone Pine Café
PREPARED BY:- SHUBHAM
SHOEB
CHITHIRA
SAIF
DIVYA
GUIDED BY :- ASHISH SIR MEHTA

2. INTRODUCTION
• Three person working with each other and took initiative
for started their own business.
• Contributed $16,000 each & agreed to share the profits
proportionally.
• Signed a one year lease to the Lone Pine Café.
• Divided duty among themselves.

3. INTRODUCTION CONTINUES
• They incurred liabilities by borrowing cash of worth
$21,000 from the bank.
• They initially invested $35,000 from their paid-in-
capital($48,000).
• Finally bought the Café in recreational area.
• They increase their assets by purchasing equipment's,
License, Cash Register etc.

4. Lone Pine Café
Balance sheet
as of 2nd November 2005
Assets Liabilities & Owners' Equity
Non-current assets Current Liabilities
- Equipments $53,200 - Bank loan $21,000
- Cash Register $1,400 Total Liabilities $21,000
Total Fixed assets $54,600
Owners' Equity
Current assets - Paid-in capital
- Foods & beverages $2,800 1. Mr. Henry Antoine $16,000
- License $1,428 2. Mrs. Henry Antoine $16,000
- checking account $10,172 3. Mrs. Sandra Landers $16,000 $48,000
Total Current Assets $14,400
TOTALASSETS $$69000 TOTAL EQUITYotal equities $69000

5. Events after 1st November till collapse of
business
• Shortly after November 1, the partners opened the restaurant.
• Mr. Antoine took the responsibility of cook.
• Mrs. Antoine & Mrs. Landers look after customers.
• Additional work of Mrs. Antoine includes ordering food, beverages
and supplies, operating cash register and look after checking
account.
• On March 30, Mr. Antoine & Mrs. Landers disappeared thus
bringing about closure of their business

6. THE FOLLOWING DATA WAS PROVIDED BY
MRS. ANTOINE TO MR. DONALD SIMPSON:-
• Cash register had contained $311.
• Checking account balance was $1030.
• Ski instructor amount was $870.
• The creditors amount was $1583.
• Depreciation on assets amounted $2445.
• Food & beverages on hand worth $2430.
• The partnership repaid $2100 bank loan.

7. Lone Pine Café
Balance sheet
as of 30th March 2006
Assets Liabilities & Owners' Equity
Non-current assets Current Liabilities
- Equipment's-(Depriciation)=53200-2455 $50,755 - Bank loan $18,900
- Cash Register $1,400 - Accounts Payable $1,583
Total Fixed assets $52,155 Total Liabilities $20,483
Current assets Owners' Equity
- Closing stock of food and beverages $2,430
- Checking account $1,030 1. Mr. Henry Antoine $12,382
- Cash $311 2. Mrs. Henry Antoine $12,382
- Account Receivable $870 3. Mrs. Sandra Landers $12,382
- Prepaid License $833 - Capital $37,146
Total Current assets $5,474
Total assets $57,629 Total equities $57,629

8. SWOT ANALYSIS
STRENGTH
• Their entrepreneurial skill is really appreciable.
• Buying a running café thus reducing cost and attracting
customers.
• Division of responsibility among themselves.
• Will power of Mrs. Antoine to continue the business that was not
running successful.

9. WEAKNESS
• Lack of any written agreement among themselves.
• Lack of transparency among the partners.
• No proper planning.
• No future action plan in case if business fails.
• Business was based on mere planning as no help and guidance of
experts .

10. OPPORTUNITY
• The only opportunity is , now she is alone to capture all customer
of lone pine cafe.

11. THREAT
• If she alone continues business and if she makes loss than she has
to pay off debt by herself.

12. FINAL PROBLEM SOLUTION
• Disregarding the marital complications, do you suppose that the
partners would have been able to receive their proportional share
of the equity determined in balance sheet as of March 30, 2006, if
the partnership was dissolved on March 30, 2006 ??? Why???
Ans. :- YES.
- According to Separate Business-Entity concept.

13. SOLUTION
• Disregarding the material complications, if partnership was
dissolved on March 30,2006 , the partners would have been able to
receive the same proportional share of equity determining ,
because they disappeared on March 30, 2006 there won’t be any
change and the balance amount will be equally shared by all the
partners.

14. THANK YOU