Quick Lunch Case Study Accounting
7
Submitted by: 11/23/2012 Ruggero Carlo J. Pango MBA 1 QUICK LUNCH Balance Sheet As of December 31, 2002 Assets Current Assets Cash $ Food & supplies invty Prepaid license Lease Rights Total Current Assets $ Fixed Assets Equipment, net Total Assets $ Liabilities & Owner's equity Current Liabilites Accounts payable $ 890.00 Accrued rent payable 1,515.00 Deferred coupon sales 1,375.00 Total Current Liabilities $ Owner's Equity Bingham's Equity $ 15,450.00 Bingham's Drawings (3,800.00) Net Income 10,335.00 Total Liabilities & Owner's equity *Note: Sale of 140 coupon books @ $27.50 3,850.00 Sale of 90 coupon books @27.50 2,475.00 Deferred coupon sales as of Dec. 31, 2002 1,375.00
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Case Study from Accounting Book by Hawkins, Merchant and Anthony
Transcript of Quick Lunch Case Study Accounting
Submitted by: 11/23/2012Ruggero Carlo J. PangoMBA 1
QUICK LUNCHBalance Sheet
As of December 31, 2002
AssetsCurrent Assets
Cash $ 12,265.00 Food & supplies invty 750.00 Prepaid license 150.00 Lease Rights 3,800.00
Total Current Assets $ 16,965.00
Fixed AssetsEquipment, net 8,800.00
Total Assets $ 25,765.00
Liabilities & Owner's equityCurrent Liabilites
Accounts payable $ 890.00 Accrued rent payable 1,515.00 Deferred coupon sales 1,375.00 *
Total Current Liabilities $ 3,780.00
Owner's EquityBingham's Equity $ 15,450.00 Bingham's Drawings (3,800.00)Net Income 10,335.00 21,985.00
Total Liabilities & Owner's equity 25,765.00 -
*Note:Sale of 140 coupon books @ $27.50 3,850.00 Sale of 90 coupon books @27.50 2,475.00 Deferred coupon sales as of Dec. 31, 2002 1,375.00
QUICK LUNCHIncome Statement
for the FOUR-MONTH Period ending December 31, 2002
SalesCash Sales $ 29,315.00 Earned coupons, net 2,475.00 **
Net Sales $ 31,790.00 Less: Cost of sales (14,415.00)
Gross Profit $ 17,375.00 Less: Operating expense
Rent expense $ 4,975.00 Lease Rights used 1,900.00 Other operating expense 90.00 City Resturant licenses 75.00 (7,040.00)
10,335.00 Add: Other Income:
Sale of cooking range 400.00 10,735.00
Less: Other Expense:Lost on broken cooking range (400.00)
10,335.00
**Note:Face value of coupon books @ $30.00 $ 4,200.00 Sale of 140 coupon books @ $27.50 3,850.00 92%
FV as of December 31, 2002 @ $30.00 $ 2,700.00 Sale of coupon books as of Dec. 31, 2002 2,475.00 92%
QUICK LUNCHCash Flow Statement
for the FOUR-MONTH Period ending December 31, 2002
Cash flow from operating activitiesNet income $ 10,335.00 Increase in food & supplies, inventory (750.00)Increase in prepaid license (150.00)Increase in Lease Rights (3,800.00)Increase in accrued food & supplies 890.00 Increase in accrued rent payable 1,515.00 Increase in deferred coupon sales 1,375.00 Net cash provided by operating activities $ 9,415.00
Cash flow from investing activitiesIncrease in Equipment $ (8,800.00)Net cash used in investing activities $ (8,800.00)
Cash flow from financing activities Increase in Bingham's equity $ 15,450.00 Increase in Bingham's drawings (3,800.00)Net cash provided by financing activities $ 11,650.00
Cash at the end of December 31, 2002 $ 12,265.00
QUICK LUNCHFinancial Ratio Analysis
Gross Profit Ratio = Gross Profit = 17,375.00 Net Sales 31,790.00
= 0.55
Operating Ratio = COGS + Operating Expense = 21,455.00 Net Sales 31,790.00
= 0.67
Current Ratio = Current Assets = 16,965.00 Current Liabilities 3,780.00
= 4.49
Debt/Equity Ratio = Total Liabilities = 3,780.00 Shareholders' Equity 21,985.00
= 0.17
Equity/Debt Ratio = Shareholders' Equity 21,985.00 Total Liabilities 3,780.00
5.82
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