Licensing and Registrations Inc. $($LRI$)$

Dan McKinley, a long$-$time friend, has come to you, CA seeking some advice. The following conversation

takes place on Wednesday morning:

Dan: $$I$$m thinking of retiring. In fact, my wife, Pam, and I are looking for a small business that we can

manage and from which we can earn $$50,000$ per year to live comfortably. But we don$$t have

much experience with this type of thing, and we are hoping you can help us out.$$

CA: $$I$$ll try, Dan. Is there anything specific that I can help you with?$$

Dan: $$Yes there is$.$ We have been approached by Steve Doty, who wants to sell his business and was

wondering if we were interested. It looks like a good little business for my wife and me and

something that we could earn a living from until we retire for good in about ten years$$ time. We

just want the business to generate enough money so that we can live comfortably and still

maintain the retirement nest egg that we have built up in the past. Steve has prepared and

information package for us regarding the history of the business and its potential in the future

$($Exhibit $1).$ Can you please let us know if you think it is a good business and if so$,$ give us your

opinion on whether we should buy it$?$

CA: $$Sure Dan. How soon do you need an answer?$$

Dan: $$Steve wants an oral commitment and small deposit by this Friday. I know that$$s not a lot of

time, but I don$$t need anything fancy $$ just a report letting us know what you think. After that

point he says that we could review his records and contracts in more detail and have a closer

look at the business and then finalize the terms of the deal.$$

CA: $$No problem, Dan. We$$ll see you on Friday morning.$$

Required:

Prepare the report for Dan McKinley