In mid-2002, Mr. and Mrs. Richard Bingham decided to go into the restaurant business. Mr. Bingham was

Question:

In mid-2002, Mr. and Mrs. Richard Bingham decided to go into the restaurant business. Mr. Bingham was dissatisfied with his job as short-order cook in a small family-owned restaurant where he earned $9.75 an hour. During July 2002, the Binghams found a business that seemed to be what they wanted. This was the Quick Lunch, a lunch counter located in fishers Department Store downtown. The Quick Lunch was operated under a lease with the department store; only the equipment was actually the property of the operator of the lunchroom. The equipment was old, but Mr. Bingham thought that it was in fairly good condition.

Questions
1. Prepare a balance sheet as of December 31, 2002, and an income statement and cash flow statement for the four-month period ending December 31, 2002. Explain briefly your treatment of the coupon books and of anything else you believe needs comment.
2. Comment briefly on the significant information revealed by your financial statements.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...