Joint Venture

BALANCE SHEET FOR THE RICHARD STOCKTON SCHOOL OF BUSINESS DECEMBER 31, 2007

Assets:

Current Assets:

Cash and Cash Equivalents $55,000

Accounts Receivable, net $440,125

Short Term Investments $25,000

Inventory $20,000

Supplies $100,000

Prepaid Insurance $25,000

Total Current Assets $665,125

Property, Plant, and Equipment:

Land $2,000,000

Building

Less: Accumulated Depreciation $1,000,000

$100,000 $900,000

Furniture, Fixtures & Equipment (Net of Depreciation $50,000) $200,000

Total Property, Plant, and Equipment $3,100,000

Intangibles:

Goodwill $50,000

Total Assets $3,815,125

Liabilities:

Current Liabilities:

Accounts Payable $200,000

Salaries and Wages Payable $300,000

Utilities Payable $15,000

Total Current Liabilities $515,000

Long Term debt:

Long-term Notes Payable $500,125

Twenty-year 8% debentures, due January 2, 2027 $500,000

Total Liabilities $1,515,125

Stockholders Equity:

Paid in on capital stock

Preferred, 7%, cumulative

Authorized, issued, and outstanding

50,000 shares of $10 par value $500,000

Common-

Authorized, 200,000 shares of

$5 par value; issued and outstanding $1,000,000

Additional paid-in capital $785,000

Retained Earnings $15,000

Total Stockholders’ Equity $2,300,000

Total Liabilities and Stockholders’ Equity $3,815,125

Our group believes that the joint venture is not only feasible within the given budget, but also has the potential to set the standard for the interaction of educational institutions and profit driven entities. The long and short-term goals of the School of Business can be met within the $1 million dollar budget. Our research has found that businesses are reluctant to hold on to an asset with fixed costs attached to it and that also does not produce any revenue. The private company, Wawa, has recently been involved in an expansion project that includes the construction of new and larger stores. In the process, Wawa has abandoned the older, smaller stores and have been attempting to sell the property. There are several properties that Wawa has had trouble selling because of the recent real estate crisis. In the mean time, Wawa has been absorbing unavoidable fixed cost from holding on to the abandoned properties. We approached Wawa with the proposition of donating the property and land from an abandoned site located on route 30, so that they can cut their fixed cost and receive a tax benefit. “Corporations and individuals are allowed to deduct contributions made to qualified domestic charitable organizations”. (Smith, 5-14) Educational institutions are considered qualified charitable organizations.

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