Lone Pine cafe case study

Lone Pine cafe case study

• 1.
  Case Study Lone PineCafe. Presented by Preety Rateria Nipun Goel Venkat raman T.Kedar Mahesh
• 2.
  Capital 48000 Mr. HenryAntoine 16000 Mrs. Henry Antoine 16000 Mrs. Sandra Landers 16000 Secured Loan nil Unsecured Loan 21000 Creditors and provisions nil Fixed assets Equipment 53200 Investments nil Current assets, loans & advances Food and beverages 2800 Checking A/c 10172 Prepaid license fees 1428 Cash Register 1400 69000 69000 Balance Sheet for the Lone Pine Cafe as of November 2, 2005.
• 3.
  Working notes: 1) Unsecuredloan 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
• 5.
  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 assets Equipment 53200 (-)depreciation 2445 50755 Investments nil Current assets, loans & advances Cash (note₄) 870 Checking A/c 1030 Food 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
• 6.
  If the Partnershipwas 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
• 7.
  Working note Food &beverages a/c Bal. b/d 2800 Creditors 1583 Cash 10016 14399 Profit/loss (bal.fig) 11969 Bal. c/d 2430 14399
• 8.
  Income Statement ofLone Pine Cafe for the year ended 30th March 2006 Sales 43480 Less Food and beverages 11969 Wages 5480 Interest 540 Telephone and electricity 3270 Miscellaneous 255 Rent 7500 License 595 Depreciation 2445 Loss by theft 1711 Payment to partners 23150 Loss during the year (bal. Figure) (13435)
• 9.
  Income Statement ofLone Pine Cafe for the year ended 30th March 2006 Sales 43480 Less Expenses 33765 Profit 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.