A firm is looking to rent space from my client for $25,000 per month. Based on the information included in the balance sheet, could I counsel my client to rent them space? Why or why not?and what the pros and cons of renting space to this firm.
Also, what other information I need to counsel my client to find out about the partnership company?
Please provide other observations you might notice about this firm, merely by reviewing this balance sheet.



Balance Sheet
As of May 18, 2006

Assets

Current Assets:
Cash $ 40,000
Office Supplies 30,000
Accounts Receivable 150,000
Note Receivable 40,000

Total Current Assets $260,000

Fixed Assets:
Equipment 70,000
Land 50,000
Building 100,000
Art Collection 600,000

Total Fixed Assets 820,000

Intangible Assets:
Copyright 50,000

Total Assets: $ 1,130,000

Liabilities & Owner’s Equity

Current Liabilities:
Unpaid Rent $ 25,000
Accounts Payable 175,000
Note Payable 100,000
Total Current Liabilities: $ 300,000

Long-Term Liabilities:
Mortgage Payable 115,000

Total Liabilities $ 415,000

Owner’s Equity:
Simon, Capital $375,000
Lucas, Capital 375,000
Wonka, Capital (35,000)
Total Owner’s Equity 715,000

Total Liabilities & Owner’s Equity $ 1,130,000