SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-K




ANNUAL
REPORT PURSUANT TO SECTION 13 or 15(d) OF


THE
SECURITIES EXCHANGE ACT OF 1934







For the fiscal year
      ended June 28, 2009
              Commission file
      Number 1-7829






BOWL
AMERICA INCORPORATED


(Exact
name of registrant as specified in its charter.)


MARYLAND
                  (State of
      Incorporation)
                54-0646173
                  (I.R.S. Employer
      Identification No.)




6446
Edsall Road, Alexandria, Virginia, 22312


(Address
of principal executive offices) (Zip Code)





(703)941-6300


Registrant's
telephone number, including area code





Securities
Registered Pursuant to Section 12(b) of the Act:


Title of Class
                    Common stock (par value
      $.10)
                  Name of Exchange on which registered
                    American Stock
      Exchange
  Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the
Securities Act.   YES [ ]  NO [X]
  Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section
15(d) of the Act.   YES[ ]  NO [X]
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements
for the past 90 days.  YES [X] NO [ ]
  Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site,
if any, every Interactive Date File required to be submitted and posted pursuant
to Rule 405 of
Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months
(or for such shorter
period that the registrant was required to submit and post such
files).   YES [ ]  NO [ ]
  Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K, (Section
229.405) is not contained herein, and will not be contained, to the best of
registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any
amendments to this Form 10-K.   [X]




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non- accelerated
filer or a smaller reporting company.  See definitions of “large
accelerated filer”, “accelerated filer”
and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer [
      ]
                  Accelerated Filer [
      ]Non-accelerated Filer [
      ]
                  Smaller reporting company
      [X]
  Indicate
by checkmark whether the registrant is a shell company (as defined by Rule 12b-2
of the Act). YES [
]  NO [X]
  As of
December 28, 2008, which was the last business day of the registrant's most
recently completed second
quarter, 3,662,711 Class A common shares were outstanding, and the aggregate
market value of the
common shares (based upon the closing price of these shares on the American
Stock Exchange) of Bowl
America Incorporated held by nonaffiliates of the registrant was approximately
$25 million. As of
that date 1,468,462 Class B common shares were outstanding.  Class B
common shareholders have the
right to convert their Class B common to Class A common stock on a share for
share basis. If the Class B
shares were converted to Class A shares as of December 28, 2008, the total
aggregate market value for
both classes of common stock held by nonaffiliates would be approximately $31
million.




Indicate
the number of shares outstanding of each of the registrant’s classes
of common stock, as of the latest practicable date:




Shares
      outstanding at

                    September
      1, 2009Class
      A Common Stock$.10
      par value
                  3,672,615Class
      B Common Stock$.10
      par value
                  1,468,462


DOCUMENTS
INCORPORATED BY REFERENCE




Portions
of registrant's definitive proxy statement, which will be filed with the
Commission not later than 120 days after June 28, 2009, are incorporated into
Part III of this Form 10-K.  The Selected Financial Data (Item 6),
Management’s Discussion & Analysis (Item 7) and financial statements (Item
8) attached to and included in this filing are incorporated herein by reference
and filed as exhibits hereto.









BOWL
AMERICA INCORPORATED
  INDEX
TO FISCAL 2009 10-K FILING
  PART
      ICover
      PageDocuments
      Incorporated by ReferenceIndex
                  
                  PageITEM
      1.
                  Business(a)
      General Development of Business
                  1(b)
      Financial Information about Industry Segments
                  1(c)
      Narrative Description of Business
                  1(d)
      Financial Information about Geographic Areas
                  1ITEM
      2.
                  Properties
                  2ITEM
      3.
                  Legal
      Proceedings
                  2ITEM
      4.
                  Submission
      of Matters to a Vote of Security Holders
                  2PART
      IIITEM
      5.
                  Market
      for Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                  2ITEM
      6.
                  Selected
      Financial Data
                  3ITEM
      7.
                  Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                  3ITEM
      8.
                  Financial
      Statements and Supplementary Data
                  3ITEM
      9.
                  Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                  3ITEM
      9A(T).
                  Controls
      and Procedures
                  4PART
      IIIITEM
      10.
                  Directors,
      Executive Officers and Corporate Governance
                  4ITEM
      11.
                  Executive
      Compensation
                  4ITEM
      12.
                  Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                  5ITEM
      13.
                  Certain
      Relationships and Related Transactions, and Director
      Independence
                  5ITEM
      14.
                  Principal
      Accountant Fees and Services
                  5PART
      IVITEM
      15.
                  Exhibits
      and Financial Statement Schedules(a)1.
      Financial Statements
                  5(a)3.
      Exhibits
                  5-6Signatures
                  
                  7-8








PART
I


ITEM
1.  BUSINESS
  (a)   General
Development of Business
  Bowl
America Incorporated (herein referred to as the “Company”) was
 incorporated in 1958.  The Company commenced business with one
bowling center  in 1958, and at the end of the past fiscal year, the
Company and its wholly-owned subsidiaries operated 19 bowling
centers.  The bowling center in Falls Church, Virginia, was closed in
February 2007, due to damage from an ice storm.  The center reopened
March 31, 2008.
  (b)   Financial
Information about Industry Segments
  The
Company operates in one segment.  Its principal source of
revenue consists of fees charged for the use of bowling lanes and other
facilities and from the sale of food and beverages for consumption on the
premises.  At the end of the fiscal year 2009, the Company had
revenues of approximately $29.7 million, per share earnings of $.60, and
approximately $43 million in total assets.  Merchandise sales,
including food and beverages, were approximately 29% of operating
revenues. The balance of operating revenues (approximately 71%) represents
fees for bowling and related services.  See the Company’s
Consolidated Financial Statements on pages 15 through 27 of this Form 10-K
for more detailed information.
  (c)   Narrative
Description of Business
  As of
September 1, 2009 the Registrant and its subsidiaries operated 10 bowling
centers in the greater metropolitan area of Washington, D.C., one bowling
center in the greater metropolitan area of Baltimore, Maryland, one
 bowling center in Orlando, Florida, three bowling centers in the
greater metropolitan area of Jacksonville, Florida, and four bowling
centers in the greater metropolitan area of Richmond,
Virginia.  These 19 bowling centers contain a total of 756
lanes.
  These
establishments are fully air-conditioned with facilities for  service of
food and beverages, game rooms, rental lockers, and meeting room
 facilities.  All centers provide shoes for rental, and bowling
balls are provided free.  In addition, each center retails
bowling accessories.  Most locations are equipped for
glow-in-the-dark bowling, popular for parties and non-league
bowling.
  The
bowling equipment essential for the Company's operation is readily
available.  The major source of its equipment is Brunswick
Corporation.
  The
bowling business is a seasonal one, and most of the business takes place
from October through May.  It is highly competitive, but the Company
has  managed to maintain its position in the markets in which it
operates.  The principal method of competition is the quality of
service furnished to the Company's customers.   Its primary
competitors are two large bowling equipment manufacturers, Brunswick
Corporation and AMF Bowling Worldwide, Inc.
  Compliance
with federal, state and local environmental protection laws has not
materially affected the Company.
  The
number of persons employed by the Company and its subsidiaries is
 approximately 650.
  (d)   Financial
Information about Geographic Areas
  The
Company has no foreign operations.
  -1-
  ITEM
2.  PROPERTIES
  The
Company's general offices are located at 6446 Edsall Road,  Alexandria,
Virginia 22312.
  Two of
the Company's bowling centers are located in leased premises, and the
remaining seventeen centers are owned by the Company.  The
Company's leases expire from 2014 through 2019.  The specific
locations of the bowling centers are discussed under Item
1(c).
  ITEM
3.  LEGAL PROCEEDINGS
  There are
no material pending legal proceedings other than ordinary routine
litigation incidental to the business.
  ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  No
matters were submitted to a vote of security holders during the  fourth
quarter ended June 28, 2009.
   PART II
  ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
  (a)
Market Information
  The
principal market on which the Company's Class A Common Stock is traded is
the NYSE Amex.  The Company's Class B Common Stock is not listed on
any exchange and is not traded.  This stock can be converted to
Class A Common Stock at any time.
  The table
below presents the high and low sales price range of the Company's Class A
Common Stock in each quarter of fiscal 2009 and 2008.
  2009
                                                                        
                                                                        1st Qtr
                                                                        
                                                                        
                                                                        2nd Qtr
                                                                        
                                                                        
                                                                        3rd Qtr
                                                                        
                                                                        
                                                                        4th QtrHigh
                                                                        
                                                                        $
                                                                        14.96
                                                                        
                                                                        
                                                                        $
                                                                        13.50
                                                                        
                                                                        
                                                                        $
                                                                        10.64
                                                                        
                                                                        
                                                                        $
                                                                        14.69Low
                                                                        
                                                                        $
                                                                        12.34
                                                                        
                                                                        
                                                                        $
                                                                        8.60
                                                                        
                                                                        
                                                                        $
                                                                        9.00
                                                                        
                                                                        
                                                                        $
                                                                        9.252008
                                                                        
                                                                        1st Qtr
                                                                        
                                                                        
                                                                        2nd Qtr
                                                                        
                                                                        
                                                                        3rd Qtr
                                                                        
                                                                        
                                                                        4th QtrHigh
                                                                        
                                                                        $
                                                                        17.35
                                                                        
                                                                        
                                                                        $
                                                                        16.28
                                                                        
                                                                        
                                                                        $
                                                                        15.91
                                                                        
                                                                        
                                                                        $
                                                                        15.75Low
                                                                        
                                                                        $
                                                                        16.10
                                                                        
                                                                        
                                                                        $
                                                                        15.76
                                                                        
                                                                        
                                                                        $
                                                                        15.20
                                                                        
                                                                        
                                                                        $
                                                                        13.75
  (b)
Holders




As of
June 28, 2009, the approximate number of holders of record of the Company's
Class A Common Stock was 355 and of the Company's Class B Common Stock was
26.




-2-





(c) Cash
Dividends




The table
below presents the quarterly cash dividends per share of Class A and Class B
stock paid, and the quarter in which the payment was made during fiscal 2009 and
2008.





Class
      A Common StockQuarter
                                          2009
                                          2008First
                                          15
      cents
                                          14.5
      centsSecond
                                          15
      cents
                                          14.5
      centsThird
                                          15
      cents
                                          25
      centsFourth
                                          15.5
      cents
                                          15
      centsClass
      B Common StockQuarter
                                          2009
                                          2008First
                                          15
      cents
                                          14.5
      centsSecond
                                          15
      cents
                                          14.5
      centsThird
                                          15
      cents
                                          25
      centsFourth
                                          15.5
      cents
                                          15
      cents




(d)
Securities Authorized for Issuance Under Equity Compensation Plans




None




(e)
Performance Graph




Not
required





ITEM
6.  SELECTED FINANCIAL DATA




The
information is set forth in the section entitled "Selected Financial Data" on
page 14 of this Form 10-K.  Such information should be read in
conjunction with the audited financial statements.




ITEM
7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS
OF OPERATIONS




The
information is set forth in the section entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations" on Pages 10
through 13 of this Form 10-K.




ITEM
8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




The
financial statements and notes thereto are set forth on pages 15 through 28 of
this Form 10-K. Supplementary
data is not required.





ITEM
9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTINGAND
FINANCIAL DISCLOSURE




None





-3-




ITEM
9A(T). CONTROLS AND PROCEDURES





Disclosure
Controls and Procedures




The
Company's disclosure controls and procedures are designed to provide reasonable
assurance that information required to be disclosed by it in its periodic
reports filed with the Securities and Exchange Commission is recorded,
processed, summarized and reported within the time periods specified in the
Commission’s rules and forms.  Based on an evaluation of the Company’s
disclosure controls and procedures conducted by the Company’s Chief Executive
Officer and Chief Financial Officer, such officers concluded that the Company's
disclosure controls and procedures were effective as of June 28,
2009.  Additionally, the Company’s officers concluded that the
Company’s disclosure controls and procedures were effective as of June 28, 2009
to ensure that information required to be disclosed in the reports filed under
the Exchange Act was accumulated and communicated to management, including the
Company’s Chief Executive Officer and Chief Financial Officer, to allow timely
decisions regarding required disclosures.





Internal
Control over Financial Reporting




(a)
Management’s Annual Report on Internal Control Over Financial Reporting




In
accordance with Section 404(a) of the Sarbanes-Oxley Act of 2002 and Item 308(a)
of the Commission’s Regulation S-K, the report of management on the Company’s
internal control over financial reporting is set forth immediately preceding the
Company’s financial statements included in this Annual Report on Form
10-K.




(b)
Changes in Internal Control Over Financial Reporting




In
accordance with Rule 13-a-15(d) under the Securities Exchange Act of 1934,
management, with the participation of the Company’s Chief Executive Officer and
Chief Financial Officer, determined that there was no change in the Company’s
internal control over financial reporting that occurred during the fourth
quarter ended June 28, 2009 that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting.




PART
III








ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE




Pursuant
to General Instruction G(3) of Form 10-K, the information called
for by this item regarding directors and executive officers is hereby incorporated
by reference from the Company's definitive proxy statement to be filed pursuant
to Regulation 14A not later than 120 days after the end of the fiscal year
covered by this report.





ITEM
11. EXECUTIVE COMPENSATION




Pursuant
to General Instruction G(3) of Form 10-K, the information called
for by this item is hereby incorporated by reference from the Company's definitive
proxy statement to be filed pursuant to Regulation 14A not later than 120
days after the end of the fiscal year covered by this report.




-4-


ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
  Pursuant
to General Instruction G(3) of Form 10-K, the information called for by this
item is hereby incorporated by reference from the Company's  definitive
proxy statement to be filed pursuant to Regulation 14A not later  than 120
days after the end of the fiscal year covered by this report.
  ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
  Pursuant
to General Instruction G(3) of Form 10-K, the information  called for by
this item is hereby incorporated by reference from the Company's
 definitive proxy statement to be filed pursuant to Regulation 14A not
later  than 120 days after the end of the fiscal year covered by this
report.
  ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Pursuant
to General Instruction G(3) of Form 10-K, the information called for by
this item is hereby incorporated by reference from the Company's definitive
proxy statement to be filed pursuant to Regulation 14A not later than 120
days after the end of the fiscal year covered by this report.
   PART
IV
  ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
  (a)
1.  Financial Statement
  The
following consolidated financial statements of Bowl America Incorporated
and its subsidiaries are incorporated by reference in Part II, Item
8:
  Report of
Independent Registered Public Accounting Firm
  Consolidated
balance sheets as of June 28, 2009 and June 29, 2008
  Consolidated
statements of earnings and comprehensive earnings- years ended June 28, 2009,
and June 29, 2008
  Consolidated
statements of stockholders' equity - years ended June 28, 2009, and June 29,
2008
  Consolidated
statements of cash flows - years ended June 28, 2009, and June 29,
2008
  Notes to
the consolidated financial statements - years ended June 28, 2009, and June 29,
2008
  (a) 2.
Exhibits:
  3(i)a
Articles of Incorporation of the Registrant and amendments through December 1988
thereto (Incorporated by reference from exhibit number 3 to the Annual Report
for 1989 on Form 10-K for fiscal year ended July 2, 1989.)
 
 -5-
  3(i)b
Amendment to and restatement of Article FIFTH (b) III 2.2 of the Registrant's
Articles of Incorporation (Incorporated by reference from the Registrant's Form
8-K filed December 9, 1994.)
  3(ii)
By-laws of the Registrant (Incorporated by reference from exhibit 3 to the
Registrant’s Annual Report on Form 10-K for fiscal year ended July 2,
1989.)
  10(a)
Employment Agreement, dated June 16, 2009, between Registrant
and Leslie H. Goldberg (Incorporated by reference From Registrant’s Form 8-K
filed June 19, 2009.)
  10(b)
Employment Agreement, dated June 16, 2009, between Registrant and Cheryl A.
Dragoo. (Incorporated by reference from Registrant's Form 8-K filed
June 19, 2009.)
  10(c)
Third Lease Amendment and Extension of Lease, dated June 16, 2009, between the
Registrant, Fairfax Circle Investors, LLC and Fairfax Circle Investors II, LLC
(Incorporated by reference from the Registrant’s Form 8-K filed June 19,
2009.) 21
Subsidiaries of registrant (Incorporated by reference from exhibit number 1
to the Registrant's Annual Report on Form 10-K for fiscal year ended June
30, 2002.)
  21
                          Subsidiaries
      of registrant (Incorporated by reference from exhibit number 1 to the
      Registrant's Annual Report on Form 10-K for fiscal year ended June
      30, 2002.)31.1
                          Written
      statement of Chief Executive Officer (Rule 13a-14a
      Certification)31.2
                          Written
      statement of Chief Financial Officer (Rule 13a-14a
      Certification)32
                          Written
      statement of Chief Executive and Chief Financial Officers (Section 1350
      Certifications)99(a)
                          Selected
      Financial Data (Item 6), set forth as page 14 hereof99(b)
                          Management’s
      Discussion & Analysis of Financial Condition and Results of Operations
      (Item 7), set forth as pages 10-13 hereof99(c)
                          Consolidated
      Financial Statements(Item 8), set forth as pages 15-28
      hereof
  -6-
  BOWL AMERICA INCORPORATED
 SIGNATURES
   Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
  BOWL
      AMERICA INCORPORATED/s/
      Leslie H. GoldbergLeslie
      H. Goldberg
                          President,Chief
      Executive and Operating Officer
                          Date: September 25,
      2009
 /s/
      Cheryl A. DragooCheryl
      A. Dragoo
                  Chief
      Financial Officer, Assistant Treasurer
                  and
      Controller Principal Accounting Officer
                  Date: September 25,
      2009  -7-
  SIGNATURES
   Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and the dates indicated.
   /s/
      Leslie H. GoldbergLeslie
      H. Goldberg
                                  President,
      Principal Executive & Operating Officer &
      Director
                                  Date: September 25,
      2009
 /s/
      Ruth Macklin
                  
                  
                  /s/
      A. Joseph LevyRuth
      Macklin
                      Senior
      Vice President-Secretary and Director
                      Date: September 25,
      2009
                  
                  
                  A.
      Joseph Levy
                        Senior
      Vice President-Secretary and Director
                        Date: September 25,
      2009 /s/
      Warren T. Braham
                                    
                                    
                                    /s/
      Stanley H. KatzmanWarren T.
      Braham
                                        Director
                                        Date: September 25,
      2009
                                    
                                    
                                    Stanley H.
      Katzman
                                        Director
                                        Date: September 25,
      2009
 /s/
      Allan L. Sher
                      
                      
                      /s/
      Merle FabianAllan
      L. Sher
                          Director
                            Date: September 25,
      2009
                      
                      
                      Merle
      Fabian
                        Director
                            Date: September 25,
      2009
 /s/
      Cheryl A. DragooCheryl
      A. Dragoo
                    Principal
      Accounting Officer and Director
                    Date: September 25,
      2009  -8-




Management’s
Annual Report on Internal Control Over Financial Reporting




The
following sets forth, in accordance with Section 404(a) of the Sarbanes-Oxley
Act of 2002 and Item 308(a) of the Securities and Exchange Commission’s
Regulation S-K, the annual report of management of Bowl America Incorporated
(the “Company”) on the Company’s internal control over financial
reporting.




1.
Management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting in a process designed by, or
under the supervision of the Company’s Chief Executive Officer and Chief
Financial Officer, and effected by the Company’s Board of Directors, management
and other personnel, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:





·
            Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;




·
            Provide
      reasonable assurance that transactions are recorded as necessary to
      permit preparation of financial statements in accordance with
      generally accepted accounting principles, and that receipts and
      expenditures of the Company are being made only in accordance with
      authorizations of management and directors of the Company;
      and




·
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the Company’s assets that
      could have a material effect on the financial
  statements.




2.
Management of the Company, in accordance with Rule 13a-15(d) under the
Securities Exchange Act of 1934 and with the participation of the Company’s
Chief Executive Officer
and Chief Financial Officer, evaluated the effectiveness of the Company’s
internal control over financial reporting as of June 28, 2009.  The
framework on which management’s evaluation of the Company’s internal control
over financial reporting is based is the “Internal Control-Integrated Framework”
published in 1992 by the Committee of Sponsoring Organizations (“COSO”) of the
Treadway Commission.




3.
Management has determined that the Company’s internal control over financial
reporting, as of June 28, 2009, was effective.  Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may
deteriorate.




4. This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the company to provide only
management’s report in this annual report.




-9-





Exhibit
99(b) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND
RESULTS OF OPERATIONS






MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND
RESULTS OF OPERATIONS





LIQUIDITY
AND CAPITAL RESOURCES




The
Company views a strong financial position as a major benefit to shareholders
and emphasizes payment of dividends as part of its financial plan.  A
portion of earnings has consistently been invested to create a reserve to
protect the Company in downturns in business, to capitalize on opportunities for
expansion and modernization and to provide a secure source of
income.  For these
reasons, the Company prefers a conservative approach to investing rather than
taking greater risk for possible rapid growth.  During times of
volatility the
Company places excess funds primarily in short-term, relatively liquid investments
such as government backed treasury funds or certificates of deposits. As a
long-standing policy long-term investments were made in domestically domiciled
stocks with the perceived potential of appreciation and safety, primarily
telecommunications stocks and in the Government National Mortgage Association (“Ginnie
Mae”) fund.




Telecom
stocks AT&T and United Telecommunications (now Sprint) were purchased in
1979 and 1984, respectively, as an alternative to cash investments and to
diversify investment holdings held in reserve.  The criteria at that
time were that the stock purchased be of a domestic American corporation, be
liquid and relatively stable.  All stocks in our portfolio have come
from spin-offs, mergers and acquisitions of the two original
companies.  While not all stocks in the portfolio are domestic
American companies any longer, since the original purchases at an approximate
cost of $630,000, we have received approximately $962,000 from mergers and sales
and over $2,500,000 in dividends.




The
Company's position in marketable equity securities, primarily telecommunication
stocks, is a source of expansion capital.  These marketable
securities are carried at their fair value on the last day of the year. The value
of the securities on June 28, 2009 was approximately $3.3 million compared to $4.3
million at June 29, 2008.  Potential volatility in the trading prices
of the marketable securities held by the Company could impact the Company’s
expansion capital derived from these investments.  During the second
quarter of fiscal 2008, the Company
received approximately $291,000 from the combination of the sale of its Alltel
holdings and the mandatory conversion of Avaya stock for cash.  The
Board of Directors reviews the portfolio weekly and any use of this reserve at
its quarterly meetings.




Cash flow
provided by operating activities in fiscal 2009 was $6,503,000 which was
sufficient to meet day-to-day cash needs.  Short-term investments consisting
mainly of Certificates of Deposits, cash and cash equivalents totaled
$11,020,000 at the end of fiscal 2009 compared to $8,404,000 at the end of
fiscal 2008.  In
the third quarter of fiscal 2007, a bowling center in Falls Church, Virginia,
was temporarily closed due to roof damage caused by an ice storm.  The building
remained closed for repairs through the first three quarters of fiscal 2008,
reopening on March 31, 2008, the first day of the fiscal 2008 fourth
quarter.




During
fiscal year 2009, the Company expended approximately $603,000 for the purchase
of bowling, entertainment and restaurant equipment.




The
Company is considering additional properties for the development of new bowling
centers.  The Company has made no application for third party funding
as cash and cash flows  are sufficient to finance all contemplated
purchases and to meet short-term purchase
commitments and operating lease commitments.




-10-
 
  Cash
dividends totaling $3.1 million, or $.605 per share were paid to shareholders
during the 2009 fiscal year, making this the thirty-seventh consecutive year of increased
regular dividends per share.  In June 2009, the Company declared a quarterly
$.155 per share dividend paid in August 2009.  While no factors
requiring a change
in the dividend rate are yet apparent, the Board of Directors decides the amount
and timing of any dividend at its quarterly meeting based on its appraisal of the
state of the business and estimate of future opportunities.





OVERVIEW




The
Company is in the entertainment business which, by its nature, has ups and downs
based on consumer tastes and whims.  About half of our business comes
from the steady league bowlers, which appears to have ended its long-term
decline.  The other half is
from casual bowlers and groups and generally depends on the public’s
discretionary budget dollars and their choices.  An unstable economy
can lead many to
participate in entertainment that is close to home and relatively
inexpensive.  Bowling has those advantages.  However, the
longer the economy remains unstable, the less
willing people are to spend on other than necessities.  Weather is
also a factor, especially for casual bowlers.  While extreme heat or
rainy weather prompt people to look for indoor activities, heavy snow storms can
keep customers from reaching the centers.  Postponed league games are
made up later in the season, but lost open play income is never
recovered.  Current economic conditions are creating challenging
times, but our response will be helped by having the resources to be able to
promote the sport.




RESULTS
OF OPERATIONS




Fiscal
years 2009 and 2008 each consisted of 52 weeks.  Nineteen centers were
in operation throughout fiscal 2009.  In fiscal 2008 eighteen centers
were in operation for the first nine months and nineteen centers were in
operation in the final three months as the Falls Church location reopened March
31, 2008 after closing in February 2007 to repair roof damage caused by an ice
storm.  All comparisons in this discussion and throughout the report
are affected by the change in the number of centers in operation in fiscal years
2009 and 2008.




The
Company received a total of $1,501,000 in final settlement from a claim under
its business interruption insurance for lost income from its Falls Church
center. Recoveries of $261,000 and $800,000 for fiscal 2009 and 2008,
respectively, are included as a credit in Operating Expenses.  The
remaining portion of $440,000 was included in Operating  Revenues in
fiscal 2007. The amounts are net after expenses.




The
following table sets forth the items in our consolidated summary of operations
for the fiscal years ended June 28, 2009 and June 29, 2008, respectively, and the
dollar and percentage changes therein.




Fifty-two
      weeks endedJune
      28, 2009 and June 29, 2008Dollars
      in thousands2009
                  
                  
                  2008
                  
                  
                  Change
                  
                  
                  %
      ChangeOperating
      Revenues:Bowling
      and other
                  
                  $
                  21,038
                  
                  
                  $
                  20,871
                  
                  
                  $
                  167
                  
                  
                  
                  .8
                  %Food,
      beverage & merchandise sales
                  
                  
                  8,674
                  
                  
                  
                  8,433
                  
                  
                  
                  241
                  
                  
                  
                  2.9Loss/gain
      on sale of assets
                  
                  
                  (1
                  )
                  
                  
                  45
                  
                  
                  
                  (46
                  )
                  
                  
                  102.229,711
                  
                  
                  
                  29,349
                  
                  
                  
                  362
                  
                  
                  
                  1.2Operating
      Expenses:Compensation
      & benefits
                  
                  
                  13,356
                  
                  
                  
                  13,749
                  
                  
                  
                  (393
                  )
                  
                  
                  (2.8
                  )Cost
      of bowling & other
                  
                  
                  7,433
                  
                  
                  
                  6,878
                  
                  
                  
                  555
                  
                  
                  
                  8.1Cost
      of food, beverage & merch sales
                  
                  
                  2,503
                  
                  
                  
                  2,532
                  
                  
                  
                  (29
                  )
                  
                  
                  (1.1
                  )Depreciation
      & amortization
                  
                  
                  1,727
                  
                  
                  
                  1,764
                  
                  
                  
                  (37
                  )
                  
                  
                  (2.1
                  )Recoveries
                  
                  
                  (261
                  )
                  
                  
                  (800
                  )
                  
                  
                  539
                  
                  
                  
                  67.3General
      & administrative
                  
                  
                  938
                  
                  
                  
                  867
                  
                  
                  
                  71
                  
                  
                  
                  8.225,696
                  
                  
                  
                  24,990
                  
                  
                  
                  706
                  
                  
                  
                  2.8Operating
      Income
                  
                  
                  4,015
                  
                  
                  
                  4,359
                  
                  
                  
                  (344
                  )
                  
                  
                  (7.9
                  )Interest
      & dividend income
                  
                  
                  679
                  
                  
                  
                  811
                  
                  
                  
                  (132
                  )
                  
                  
                  (16.3
                  )Investment
      earnings
                  
                  
                  -
                  
                  
                  
                  267
                  
                  
                  
                  (267
                  )
                  
                  
                  (100.0
                  )Earnings
      before taxes
                  
                  
                  4,694
                  
                  
                  
                  5,437
                  
                  
                  
                  (743
                  )
                  
                  
                  (13.7
                  )Income
      taxes
                  
                  
                  1,637
                  
                  
                  
                  1,902
                  
                  
                  
                  (265
                  )
                  
                  
                  (14.0
                  )Net
      Earnings
                  
                  $
                  3,057
                  
                  
                  $
                  3,535
                  
                  
                  $
                  (478
                  )
                  
                  
                  (13.5
                  )




-11-





Operating
Revenues




Total
operating revenue increased $362,000 to $29.7 million in fiscal 2009 compared to
a decrease of $2,201,000 to $29.3 million in fiscal 2008.  Operating
revenues excluding the loss or gain on the sale of assets increased $408,000 in
fiscal 2009 and decreased $2,230,000 in fiscal 2008 during which the Falls
Church center was open for only three months.  Bowling and other
revenue increased $167,000 in fiscal 2009 versus a decrease of
$1,446,000 in fiscal 2008.  Food, beverage and merchandise sales
increased $241,000 in fiscal
2009 partially due to events where food and beverage service is primary and
bowling is secondary.  In fiscal 2008 this same revenue source
declined $425,000.




Operating
Expenses




As
discussed in more detail below, total operating expenses increased 3%, or $706,000,
in fiscal year 2009 versus a decrease of 4%, or $1,051,000, fiscal 2008
partially due to the change in the number of centers in
operation.  Costs for employee compensation and benefits were down 3%
in fiscal 2009 and down 2% in the prior year period.  During fiscal
2009, in response to economic conditions, the Company made scheduling
adjustments that resulted in savings in this category.  Approximately
half the
decrease in fiscal 2008 was the reduced payroll at the Falls Church
location.  Included in this category of expense are contributions to
our two benefit plans, both of which
are defined contribution plans.  There is no additional obligation
beyond the current year contribution.




Cost of
bowling and other services increased 8%, or $555,000, in fiscal 2009 compared
to a decrease of 1% or $79,000, in fiscal year 2008.  Maintenance
expense was up 12%, or $99,000, in fiscal 2009 primarily due to building and
parking lot repairs.  The same category decreased 13% in fiscal
2008.  Supplies expense rose 8%, or $73,000, in fiscal 2009, compared
to a decrease of 10% in fiscal 2008, partially due to the change in needs for
the Falls Church center.  Advertising costs increased $194,000, or
35%, in fiscal 2009 due principally to aggressive print campaigns, compared to a
decline of $41,000, or 7%, in fiscal 2008.  Utility costs were up 13%
in fiscal 2009 and 3% in fiscal 2008 primarily as a result of increased electric
costs.




Rent
expense increased 3% in fiscal 2009 compared to a decrease of 13% in fiscal year
2008 primarily as a result of changes in percentage rent at a leased
location.  Insurance expense, excluding health and life, was flat in
fiscal 2009 due to the current soft insurance market, compared to an increase of
3% in fiscal 2008.




Depreciation
expenses decreased 2% in fiscal year 2009 as some large assets reached full
depreciation and decreased 8% in fiscal 2008 when no depreciation expense was
recorded for Falls Church for the period of its closure.




Operating
income in fiscal 2009 decreased 8% from $4.4 million in fiscal 2008 to $4.0
million.




-12-




Interest
and Dividend Income




Interest
and dividend income decreased 16% to $679,000 in fiscal 2009 primarily due to
the continuing decline in interest rates. The 6% decrease to $811,000 in 2008
was partially the result of lower cash flows from operations, primarily the
closure of Falls Church February 2007 through March 2008, and the increased
dividends paid by the Company on its Common Stock during the year including the
$.10 per share extra dividend paid in January 2008.





Investment
Earnings




In fiscal
2008, the Company recorded a pre-tax gain of $267,000 from the sale of Alltel
stock and the mandatory exchange for cash of its Avaya holdings.





Income
taxes




Effective
income tax rates for the Company were 34.9% for fiscal 2009 and 35% for fiscal
2008, the difference from statutory rates being primarily for the partial
exclusion of dividends received on investments.





Net
Earnings





Net
earnings in fiscal 2009 were $3.1 million, or $.60 per share, compared to $3.5
million, or $.69 per share in fiscal 2008.





CRITICAL
ACCOUNTING POLICIES





We have
identified accounting for marketable investment securities under
SFAS 115, "Accounting for Certain Investments in Debt and Equity Securities",
as a critical accounting policy due to the significance of the
amounts included in our balance sheet.  The Company exercises judgment in
determining the classification of its investment securities as
available- for-sale
and in determining their fair value.  The Company records these investments
at their fair value based on quoted market prices with the unrealized
gain or loss recorded in accumulated other comprehensive income, a
component of stockholders' equity, net of deferred
taxes.  Additionally, from time
to time the Company must assess whether write-downs are necessary for other
than temporary declines in value.





We have
identified accounting for the impairment of long-lived assets under
SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, as a
critical accounting policy due to the significance of the amounts included in our
balance sheet under the caption of Land, Buildings and Equipment.  The Company
reviews long-lived assets whenever events or changes indicate that the carrying
amount of an asset may not be recoverable.  In making such
evaluations, the
Company compares the expected future cash flows to the carrying amount of the
assets.  An impairment loss equal to the difference between the
assets' fair
value and carrying value is recognized when the estimated undiscounted future
cash flows are less than the carrying amount.








-13-
 
  Exhibit
99(a) Selected Financial Data
 BOWL
AMERICA INCORPORATED AND SUBSIDIARIES
 CONSOLIDATED
SUMMARY OF OPERATIONS
 
 
 Selected
Financial Data
  For
      the Years EndedJune
      28,
                      
                      
                      June
      29,
                      
                      
                      July
      1,
                      
                      
                      July
      2,
                      
                      
                      July
      3,2009
                      
                      
                      2008
                      
                      
                      2007
                      
                      
                      2006
                      
                      
                      2005Operating
      revenues
                      
                      $
                      29,710,743
                      
                      
                      $
                      29,349,214
                      
                      
                      $
                      31,989,893
                      
                      
                      $
                      30,343,279
                      
                      
                      $
                      28,672,676Operating
      expenses
                      
                      
                      25,696,315
                      
                      
                      
                      24,990,753
                      
                      
                      
                      26,481,388
                      
                      
                      
                      25,410,113
                      
                      
                      
                      23,435,145Interest
      and dividend income
                      
                      
                      679,287
                      
                      
                      
                      811,205
                      
                      
                      
                      863,983
                      
                      
                      
                      655,818
                      
                      
                      
                      609,963Investment
      earnings (loss)
                      
                      
                      -
                      
                      
                      
                      267,237
                      
                      
                      
                      (3,613
                      )
                      
                      
                      -
                      
                      
                      
                      151,817Earnings
      before provision for income taxes
                      
                      
                      4,693,715
                      
                      
                      
                      5,436,903
                      
                      
                      
                      6,368,875
                      
                      
                      
                      5,588,984
                      
                      
                      
                      5,999,311Provision
      for income taxes
                      
                      
                      1,636,433
                      
                      
                      
                      1,902,363
                      
                      
                      
                      2,179,932
                      
                      
                      
                      1,949,409
                      
                      
                      
                      2,150,030Net
      earnings
                      
                      $
                      3,057,282
                      
                      
                      $
                      3,534,540
                      
                      
                      $
                      4,188,943
                      
                      
                      $
                      3,639,575
                      
                      
                      $
                      3,849,281Weighted
      average shares outstanding- Basic & Diluted
                      
                      
                      5,133,375
                      
                      
                      
                      5,135,693
                      
                      
                      
                      5,136,499
                      
                      
                      
                      5,136,968
                      
                      
                      
                      5,137,773Earnings
      per share- Basic & Diluted
                      
                      $
                      .60
                      
                      
                      $
                      .69
                      
                      
                      $
                      .82
                      
                      
                      $
                      .71
                      
                      
                      $
                      .75Net
      cash provided by operating activities
                      
                      $
                      6,502,922
                      
                      
                      $
                      3,499,703
                      
                      
                      $
                      6,101,075
                      
                      
                      $
                      4,292,512
                      
                      
                      $
                      5,503,187Cash
      dividends paid
                      
                      $
                      3,105,700
                      
                      
                      $
                      3,543,631
                      
                      
                      $
                      2,927,853
                      
                      
                      $
                      2,876,696
                      
                      
                      $
                      2,774,419Cash
      dividends paid Per share - Class A
                      
                      $
                      0.605
                      
                      
                      $
                      0.69
                      
                      
                      $
                      0.57
                      
                      
                      $
                      0.56
                      
                      
                      $
                      0.54-Class B
                      
                      $
                      0.605
                      
                      
                      $
                      0.69
                      
                      
                      $
                      0.57
                      
                      
                      $
                      0.56
                      
                      
                      $
                      0.54Total
      assets
                      
                      $
                      42,966,669
                      
                      
                      $
                      44,056,750
                      
                      
                      $
                      45,834,730
                      
                      
                      $
                      43,130,385
                      
                      
                      $
                      42,548,998Stockholders'
      equity
                      
                      $
                      37,579,197
                      
                      
                      $
                      38,214,963
                      
                      
                      $
                      39,337,237
                      
                      
                      $
                      37,088,954
                      
                      
                      $
                      36,191,662Net
      book value per share
                      
                      $
                      7.31
                      
                      
                      $
                      7.44
                      
                      
                      $
                      7.66
                      
                      
                      $
                      7.22
                      
                      
                      $
                      7.04Net
      earnings as a % of beginning stock holders' equity
                      
                      
                      8.0
                      %
                      
                      
                      9.0
                      %
                      
                      
                      11.3
                      %
                      
                      
                      10.1
                      %
                      
                      
                      11.0
                      %Lanes
      in operation
                      
                      
                      756
                      
                      
                      
                      756
                      
                      
                      
                      756
                      
                      
                      
                      756
                      
                      
                      
                      716Centers
      in operation
                      
                      
                      19
                      
                      
                      
                      19
                      
                      
                      
                      19
                      
                      
                      
                      19
                      
                      
                      
                      18
   -14-
 [LETTERHEAD OF ARONSON
& COMPANY]
  805 King
Farm Boulevard
 Rockville,
Maryland 20850
 Phone
301.231.6200
 Fax
301.231.7630
  Independent
Auditor’s Report
  Board of
Directors and Stockholders
 Bowl
America Incorporated
 Alexandria,
Virginia
  We have
audited the accompanying Consolidated Balance Sheets of Bowl America
Incorporated and Subsidiaries as of June 28, 2009 and June 29, 2008, and the
related Consolidated Statements of Earnings and Comprehensive Earnings,
Stockholders' Equity and Cash Flows for the years then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management. We believe that our audits provide a reasonable basis for
our opinion.
  In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Bowl America Incorporated
and Subsidiaries as of June 28, 2009 and June 29, 2008, and the results of their
operations and their cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of
America.
  /S/
Aronson & Company
  Aronson
& Company
 Rockville,
Maryland
 September
25, 2009
  -15-
  Exhibit
99(c) Consolidated Financial Statements
 
 BOWL
AMERICA INCORPORATED AND SUBSIDIARIES
 Consolidated
Balance Sheets
  As
      ofJune
      28,
                          
                          
                          June
      29,2009
                          
                          
                          2008ASSETSCURRENT
      ASSETS:Cash
      and cash equivalents (Note 2)
                          
                          $
                          3,459,812
                          
                          
                          $
                          2,129,512Short-term
      investments (Note 3)
                          
                          
                          7,560,195
                          
                          
                          
                          6,274,274Inventories
                          
                          
                          509,892
                          
                          
                          
                          800,559Prepaid
      expenses and other
                          
                          
                          453,007
                          
                          
                          
                          1,959,849Income
      taxes refundable
                          
                          
                          426,657
                          
                          
                          
                          366,984Current
      deferred income taxes (Note 7)
                          
                          
                          -
                          
                          
                          
                          27,141TOTAL
      CURRENT ASSETS
                          
                          
                          12,409,563
                          
                          
                          
                          11,558,319LAND,
      BUILDINGS & EQUIPMENT, net (Note 4)
                          
                          
                          23,720,920
                          
                          
                          
                          24,860,760OTHER
      ASSETS:Marketable
      investment securities (Note 3)
                          
                          
                          6,194,270
                          
                          
                          
                          7,008,263Cash
      surrender value-life insurance
                          
                          
                          542,136
                          
                          
                          
                          529,628Other
                          
                          
                          99,780
                          
                          
                          
                          99,780TOTAL
      OTHER ASSETS
                          
                          
                          6,836,186
                          
                          
                          
                          7,637,671TOTAL
      ASSETS
                          
                          $
                          42,966,669
                          
                          
                          $
                          44,056,750LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIES:Accounts
      payable
                          
                          $
                          917,295
                          
                          
                          $
                          919,760Accrued
      expenses
                          
                          
                          1,085,700
                          
                          
                          
                          1,147,524Dividends
      payable
                          
                          
                          796,868
                          
                          
                          
                          770,353Other
      current liabilities
                          
                          
                          342,404
                          
                          
                          
                          332,385Current
      deferred income taxes
                          
                          
                          24,627
                          
                          
                          
                          -TOTAL
      CURRENT LIABILITIES
                          
                          
                          3,166,894
                          
                          
                          
                          3,170,022LONG-TERM
      DEFERRED COMPENSATION
                          
                          
                          51,408
                          
                          
                          
                          54,621NONCURRENT
      DEFERRED INCOME TAXES (Note 7)
                          
                          
                          2,169,170
                          
                          
                          
                          2,617,144TOTAL
      LIABILITIES
                          
                          
                          5,387,472
                          
                          
                          
                          5,841,787COMMITMENTS
      AND CONTINGENCIES (Note 5)STOCKHOLDERS'
      EQUITY (Note 8)Preferred
      stock, par value $10 a share:Authorized
      and unissued,2,000,000
      shares
                          
                          
                          -
                          
                          
                          
                          -Common
      stock, par value $.10 a share:Authorized,
      10,000,000 sharesClass
      A issued and outstanding 3,672,615 and 3,667,228
                          
                          
                          367,261
                          
                          
                          
                          366,722Class
      B issued and outstanding 1,468,462
                          
                          
                          146,846
                          
                          
                          
                          146,846Additional
      paid-in capital
                          
                          
                          7,594,615
                          
                          
                          
                          7,478,838Accumulated
      other comprehensive earnings-Unrealized
      gain on available-for-salesecurities,
      net of tax
                          
                          
                          1,643,497
                          
                          
                          
                          2,281,121Retained
      earnings
                          
                          
                          27,826,978
                          
                          
                          
                          27,941,436TOTAL
      STOCKHOLDERS'EQUITY
                          
                          
                          37,579,197
                          
                          
                          
                          38,214,963TOTAL
      LIABILITIES AND STOCKHOLDERS'EQUITY
                          
                          $
                          42,966,669
                          
                          
                          $
                          44,056,750
  The
accompanying notes to the consolidated financial statements are an integral part
of these financial statements.
 -16-
  BOWL AMERICA INCORPORATED
AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF
EARNINGS AND COMPREHENSIVE EARNINGS
 
 For
      the Years EndedJune
      28,
                                  
                                  
                                  June
      29,2009
                                  
                                  
                                  2008Operating
      Revenues:Bowling
      and other
                                  
                                  $
                                  21,037,547
                                  
                                  
                                  $
                                  20,870,757Food,
      beverage and merchandise sales
                                  
                                  
                                  8,674,571
                                  
                                  
                                  
                                  8,433,089(Loss)
      gain on sale of land, buildings and equipment
                                  
                                  
                                  (1,375
                                  )
                                  
                                  
                                  45,36829,710,743
                                  
                                  
                                  
                                  29,349,214Operating
      Expenses:Employee
      compensation and benefits
                                  
                                  
                                  13,356,076
                                  
                                  
                                  
                                  13,749,121Cost
      of bowling and other services
                                  
                                  
                                  7,433,061
                                  
                                  
                                  
                                  6,877,826Cost
      of food, beverage and merchandise sales
                                  
                                  
                                  2,503,200
                                  
                                  
                                  
                                  2,532,285Depreciation
      and amortization
                                  
                                  
                                  1,726,854
                                  
                                  
                                  
                                  1,764,226Recoveries
                                  
                                  
                                  (261,100
                                  )
                                  
                                  
                                  (800,000
                                  )General
      and administrative
                                  
                                  
                                  938,224
                                  
                                  
                                  
                                  867,29525,696,315
                                  
                                  
                                  
                                  24,990,753Operating
      Income
                                  
                                  
                                  4,014,428
                                  
                                  
                                  
                                  4,358,461Interest
      and dividend income
                                  
                                  
                                  679,287
                                  
                                  
                                  
                                  811,205Investment
      earnings
                                  
                                  
                                  -
                                  
                                  
                                  
                                  267,237Earnings
      before provision for incomeTaxes
                                  
                                  
                                  4,693,715
                                  
                                  
                                  
                                  5,436,903Provision
      for income taxes (Note 7)Current
                                  
                                  
                                  1,720,556
                                  
                                  
                                  
                                  2,022,306Deferred
                                  
                                  
                                  (84,123
                                  )
                                  
                                  
                                  (119,943
                                  )1,636,433
                                  
                                  
                                  
                                  1,902,363Net
      Earnings
                                  
                                  $
                                  3,057,282
                                  
                                  
                                  $
                                  3,534,540Earnings
      per share-basic & diluted
                                  
                                  $
                                  .60
                                  
                                  
                                  $
                                  .69Weighted
      average shares outstanding
                                  
                                  
                                  5,133,375
                                  
                                  
                                  
                                  5,135,693Dividends
      paid
                                  
                                  $
                                  3,105,700
                                  
                                  
                                  $
                                  3,543,631Per
      share, dividends paid, Class A
                                  
                                  $
                                  .605
                                  
                                  
                                  $
                                  .69Per
      share, dividends paid, Class B
                                  
                                  $
                                  .605
                                  
                                  
                                  $
                                  .69Net
      Earnings
                                  
                                  $
                                  3,057,282
                                  
                                  
                                  $
                                  3,534,540Other
      comprehensive earnings- net of taxUnrealized
      loss on available-for–salesecurities
      net of tax benefit of$309,664
      and $543,668
                                  
                                  
                                  (637,624
                                  )
                                  
                                  
                                  (926,896
                                  )Add:
      reclassification adjustment forgain
      included in net income,net
      of tax of $98,797
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (160,175
                                  )Comprehensive
      earnings
                                  
                                  $
                                  2,419,658
                                  
                                  
                                  $
                                  2,447,469
 
 The
accompanying notes to the consolidated financial statements are an integral part
of these financial statements.
  -17-
 
 BOWL AMERICA INCORPORATED AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
  COMMON
      STOCK
                            
                            
                            
                            
                            
                            AccumulatedClass
      A
                              Shares
                            
                            
                            Class
      A
                              Amount
                            
                            
                            Class
      B
                              Shares
                            
                            
                            Class
      B
                              Amount
                            
                            
                            Additional
                              Paid-In
      Capital
                            
                            
                            Other
      Comprehensive Earnings
                            
                            
                            Retained
                              EarningsBalance,
      July 1, 2007
                            
                            
                            3,667,254
                            
                            
                            $
                            366,725
                            
                            
                            
                            1,468,462
                            
                            
                            $
                            146,846
                            
                            
                            $
                            7,478,876
                            
                            
                            $
                            3,368,192
                            
                            
                            $
                            27,976,598Purchase
      of stock
                            
                            
                            (26
                            )
                            
                            
                            (3
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (38
                            )
                            
                            
                            -
                            
                            
                            
                            (397
                            )Cash
      dividends paid
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (2,798,952
                            )Accrued
      dividends declaredJune
      17, 2008, payableAugust
      6, 2008
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (770,353
                            )Change
      in unrealized gain onavailable-for-sale
      securities(shown
      net of tax)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (926,896
                            )
                            
                            
                            -Reclassification
      adjustmentfor
      gain included in net income,net
      of tax
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (160,175
                            )
                            
                            
                            -Net
      earnings for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            3,534,540Balance,
      June 29,2008
                            
                            
                            3,667,228
                            
                            
                            $
                            366,722
                            
                            
                            
                            1,468,462
                            
                            
                            $
                            146,846
                            
                            
                            $
                            7,478,838
                            
                            
                            $
                            2,281,121
                            
                            
                            $
                            27,941,436Purchase
      of stock
                            
                            
                            (4,613
                            )
                            
                            
                            (461
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (6,823
                            )
                            
                            
                            -
                            
                            
                            
                            (39,525
                            )Shares
      issue for ESOP
                            
                            
                            10,000
                            
                            
                            
                            1,000
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            122,600
                            
                            
                            
                            -
                            
                            
                            
                            -Cash
      dividends paid
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (2,335,347
                            )Accrued
      dividends declaredJune
      16, 2009, payableAugust
      12, 2009
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (796,868
                            )Change
      in unrealized gain on available-for-sale securities (shown net of
      tax)
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (637,624
                            )
                            
                            
                            -Net
      earnings for the year
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            3,057,282Balance,
      June 28, 2009
                            
                            
                            3,672,615
                            
                            
                            $
                            367,261
                            
                            
                            
                            1,468,462
                            
                            
                            $
                            146,846
                            
                            
                            $
                            7,594,615
                            
                            
                            $
                            1,643,497
                            
                            
                            $
                            27,826,978
   The
accompanying notes to the consolidated financial statements are an integral part
of these financial statements.
 -18-
 
 BOWL
AMERICA INCORPORATED AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 
 For
      the Years EndedJune
      28,
                      
                      
                      June
      29,2009
                      
                      
                      2008Cash
      Flows From Operating ActivitiesNet
      earnings
                      
                      $
                      3,057,282
                      
                      
                      $
                      3,534,540Adjustments
      to reconcile net earningsto
      net cash provided byoperating
      activities:Depreciation
      and amortization
                      
                      
                      1,726,854
                      
                      
                      
                      1,764,226Decrease
      in deferred income tax
                      
                      
                      (84,123
                      )
                      
                      
                      (119,943
                      )Loss
      (gain) on disposition of assets-net
                      
                      
                      1,375
                      
                      
                      
                      (45,368
                      )Gain
      on sale of available-for-sale securitiessale
      securities
                      
                      
                      -
                      
                      
                      
                      (267,237
                      )Stock
      issuance – ESOP plan
                      
                      
                      123,600
                      
                      
                      
                      -Changes
      in assets and liabilitiesDecrease
      (increase) in inventories
                      
                      
                      290,667
                      
                      
                      
                      (218,854
                      )Decrease
      (increase) in prepaid & other
                      
                      
                      1,506,842
                      
                      
                      
                      (892,326
                      )Increase
      in income taxes refundable
                      
                      
                      (59,673
                      )
                      
                      
                      (330,429
                      )Increase
      in other long-term assets
                      
                      
                      (2,420
                      )
                      
                      
                      (3,100
                      )(Decrease)
      increase in accounts payable
                      
                      
                      (2,465
                      )
                      
                      
                      463(Decrease)
      increase in accrued expenses
                      
                      
                      (61,824
                      )
                      
                      
                      80,321Increase
      in other current liabilities
                      
                      
                      10,020
                      
                      
                      
                      2,013Decrease
      in long-term deferred compensation
                      
                      
                      (3,213
                      )
                      
                      
                      (4,603
                      )Net
      cash provided byoperating
      activities
                      
                      
                      6,502,922
                      
                      
                      
                      3,499,703Cash
      Flows From Investing ActivitiesExpenditures
      for land, building and equipment
                      
                      
                      (602,889
                      )
                      
                      
                      (740,277
                      )Sale
      of assets
                      
                      
                      14,500
                      
                      
                      
                      47,900Net
      (purchases) sales & maturities of short-termInvestments
                      
                      
                      (1,285,921
                      )
                      
                      
                      1,191,337Purchases
      of marketable securities
                      
                      
                      (133,295
                      )
                      
                      
                      (135,831
                      )Increase
      in cash surrender value
                      
                      
                      (12,508
                      )
                      
                      
                      (27,528
                      )Proceeds
      from sale of marketable securities
                      
                      
                      -
                      
                      
                      
                      290,932Net
      cash (used in) provided byinvesting
      activities
                      
                      
                      (2,020,113
                      )
                      
                      
                      626,533Cash
      Flows From Financing ActivitiesPayment
      of cash dividends
                      
                      
                      (3,105,700
                      )
                      
                      
                      (3,543,631
                      )Purchase
      of Class A Common Stock
                      
                      
                      (46,809
                      )
                      
                      
                      (438
                      )Net
      cash used in financing activities
                      
                      
                      (3,152,509
                      )
                      
                      
                      (3,544,069
                      )Net
      Increase in Cash and Equivalents
                      
                      
                      1,330,300
                      
                      
                      
                      582,167Cash
      and Equivalents, Beginning of period
                      
                      
                      2,129,512
                      
                      
                      
                      1,547,345Cash
      and Equivalents, End of period
                      
                      $
                      3,459,812
                      
                      
                      $
                      2,129,512Supplemental
      Disclosures of Cash Flow InformationCash
      Paid During the Period for:Income
      taxes
                      
                      $
                      1,795,939
                      
                      
                      $
                      2,352,735
  The
accompanying notes to the consolidated financial statements are an integral part
of these financial statements.
 -19-
 BOWL
AMERICA INCORPORATED AND SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 
 
 1.
                  ORGANIZATION
      AND SIGNIFICANT ACCOUNTING POLICIES
 
 Organization
  Bowl
America Incorporated is engaged in the operation of 19 bowling centers,
with food and beverage service in each center.  Ten centers are located
in metropolitan Washington D.C., one center in metropolitan Baltimore,
Maryland, one center in metropolitan Orlando, Florida, four centers
in metropolitan Richmond, Virginia, and three centers in metropolitan Jacksonville,
Florida.  These 19 centers contain a total of 756 lanes. The
Company operates in one segment.
 
 Principles
of Consolidation
  The
consolidated financial statements include the accounts of the Company and all
of its wholly owned subsidiary corporations.  All significant
inter- company
items have been eliminated in the consolidated financial
statements.
  Fiscal
Year
  The
Company's fiscal year ends on the Sunday nearest to June 30.  Fiscal year 2009
ended June 28, 2009, and fiscal year 2008 ended June 29, 2008. Fiscal
years 2009 and 2008 each consisted of 52 weeks.
 
 Subsequent
Events
  The
Company has evaluated subsequent events through the time of filing these
financial statements with the Securities and Exchange Commission on September
25, 2009.
 
 Estimates
  The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions.  These estimates and assumptions
affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results may differ from those estimates. Significant
estimates include the deferred compensation liability for executives and key
employees including survivor benefits, depreciation expense, cash surrender
value of officers' life insurance, the Federal and State income taxes (current
and deferred), and market assumptions used in estimating the fair value of
certain assets
such as marketable securities and long-lived assets.
 
 Revenue
Recognition
  The
Company records revenue for fees charged for use of bowling lanes and other
facilities at the time the services are provided.  Food, beverage and merchandise
sales are recorded as revenue at the time the product is given to the
customer.
 
 Depreciation
and Amortization
  Depreciation
and amortization for financial statement purposes are calculated
by use of the straight-line method.  Amortization of leasehold improvements
is calculated over the estimated useful life of the asset or term of
the lease, whichever is shorter.  The categories of property, plant, and
equipment and the ranges of estimated useful lives on which depreciation and
amortization rates are based are as follows:
  -20-
  Bowling
      lanes and equipment
                          3-10
      yearsBuilding
      and building improvements
                          10-39
      yearsLeasehold
      improvements
                          5-10
      yearsAmusement
      games
                          3-5
      years
 Maintenance
and repairs and minor replacements are charged to expense when incurred.  Major
replacements and betterments are capitalized.  The accounts are
adjusted for the sale or other disposition of property, and the resulting gain or
loss is credited or charged to income.
 
 Impairment
of Long-Lived Assets
  The
Company reviews long-lived assets whenever events or changes indicate that the
carrying amount of an asset may not be recoverable.  In making such evaluations,
the Company compares the expected future cash flows to the carrying
amount of the assets.  An impairment loss, equal to the difference between
the assets' fair value and carrying value, is recognized when the
estimated undiscounted future cash flows are less than the carrying
amount.
 
 Dividends
  It is the
Company's policy to accrue a dividend liability at the time the dividends
are declared.
 
 Advertising
Expense
  It is the
Company's policy to expense advertising expenditures as they are incurred.  The
Company's advertising expenses for the years ending June 28, 2009, and June 29,
2008, were $743,748 and $549,548, respectively.
 
 Inventories
  Inventories
are stated at the lower of cost (first-in, first-out method) or
market.  Inventories consist of resale merchandise including food and
beverage and bowling supplies.
 
 Income
Taxes
  Income
taxes are accounted for in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes".  Under
this method, deferred income tax liabilities and assets are based
on the differences between the financial statement and tax bases of assets
and liabilities, using tax rates currently in effect. A valuation allowance
is provided when it is more likely than not that a deferred tax asset
will not be realized.
 
 Investment
Securities
  The
Company accounts for its investments in accordance with SFAS No. 115 "Accounting
for Certain Investments in Debt and Equity Securities".  All of the
Company's readily marketable debt and equity securities are classified as available-for-sale.  Accordingly,
these securities are recorded at fair value with any
unrealized gains and losses excluded from earnings and reported, net of
deferred taxes, within a separate component of stockholders' equity until realized.  Realized
gains or losses on the sale of debt and equity securities are
reported in earnings and determined using the adjusted cost of the specific
security sold.
 
 -21-
 Earnings
Per Share
  Earnings
per share basic and diluted, have been calculated using the weighted
average number of shares of Class A and Class B common stock outstanding
of 5,133,375, and 5,135,693, for fiscal years 2009 and 2008,
respectively.
 
 Comprehensive
Earnings
  In
accordance with SFAS No. 130 "Reporting Comprehensive Income", a consolidated
statement of comprehensive earnings reflecting the aggregation of net
earnings and unrealized gain or loss on available-for-sale securities, the
Company's principal components of other comprehensive earnings, has been presented
for each of the two years in the period ended June 28, 2009.
 
 Cash and
Cash Equivalents
  For
purposes of the consolidated statements of cash flows, the Company considers
money market funds, certificates of deposits, and repurchase agreements
with original maturities of three months or less to be cash equivalents.  The
Company maintains cash accounts which may exceed Federally insured
limits during the year, but does not believe that this results in any significant
credit risk.
 
 Other
Current Liabilities
  Other
current liabilities include prize fund monies held by the Company for
bowling leagues.  The funds are returned to the leagues at the end of
the league
bowling season.  At June 28, 2009, and June 29, 2008 other current liabilities
included $342,747, and $334,785, respectively, in prize fund monies.
 
 Reclassifications
  Certain
previous year amounts have been reclassified to conform with the current
year presentation.
 
 New
Accounting Standards
  In May
2009, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (SFAS) No. 165, Subsequent Events(SFAS 165),
which establishes general standards of accounting for and the disclosure of
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued.  The statement is applicable
to all fiscal periods ending after June 15, 2009.  The Company has
adopted this standard for fiscal year end 2009 and adoption will not have a
material effect on the financial statements.
 
 In June
2009, the FASB issued SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles-a
replacement of FASB Statement No. 162.  The codification will
supersede all previously issued non-SEC issued guidance as the authoritative
source of generally accepted accounting principles.  The standard is
effective for periods ending after September 15, 2009.  This standard
will not have a material impact on the financial statements because the FASB has
stated that the codification is not intended to change generally accepted
accounting principles other than the format of presentation.
 
 In April
2009, the FASB issued FASB Staff Position (“FSP”) FSP 115-2 and FSP 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments.  This statement provides
guidance on evaluating whether impairment is other-than-temporary, the amount of
any such impairment that should be recorded and the appropriate financial
statement disclosures.  This statement is effective for reporting
periods ending
after June 15, 2009.  The Company adopted this staff position
effective June 28, 2009 and adoption does not have a material effect on the
financial statements.
 
 -22-
 In
October 2008, the FASB issued FSP 157-3, Determining the Fair Value of a
Financial Asset When the Market of the Asset is Not
Active.  This staff position clarifies the application of SFAS
157, Fair Value Measurements, in a market that is not active and provides
considerations for determining fair value of a financial asset when the market
for that asset is not active.  This staff position was effective upon
issuance.  The Company adopted this staff position in fiscal year 2009
and adoption has not had a material impact on the financial
statements.
 
 In April
2009, the FASB issued FSP 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not
Orderly.This staff position provides guidance on estimating
fair value when volume levels of activity for an asset or liability have
significantly decreased as well as guidance in identifying circumstances that
indicate a transaction is not orderly.  This statement is effective
for reporting periods ending after June 15, 2009.  The Company has
adopted this staff position on June 28, 2009 and adoption does not have a
material impact on the financial statements.
 
 2.
                  CASH
      AND CASH EQUIVALENTS
  Cash and
cash equivalents consisted of the following:
  June
      28,
                                
                                
                                June
      29,2009
                                
                                
                                2008Demand
      deposits and cash on hand
                                
                                $
                                2,949,812
                                
                                
                                $
                                1,015,558Money
      market funds
                                
                                
                                -
                                
                                
                                
                                175,645Repurchase
      agreements
                                
                                
                                510,000
                                
                                
                                
                                938,309$
                                3,459,812
                                
                                
                                $
                                2,129,512
  The
Company’s money market funds invest in short term government
securities.  The Company’s overnight repurchase agreements have
restrictions that allow for the funds to be invested only in government backed
securities.  The account balances at times exceed federally insured
limits.  The Company does not believe this poses any significant
risk.
 
 3.
                  INVESTMENTS
  The
Company’s marketable securities are categorized as available-for-sale securities
as defined by SFAS No. 115, “Accounting for Certain Investments in Debt and
Equity Securities”.  The cost for marketable securities was determined
using the specific identification method.  The fair values of
marketable securities are based on the quoted market price for those
securities.  Short-term investments consist of certificates of
deposits and U.S. Treasury securities with maturities of generally three months
to one year.  At June 28, 2009, the fair value of short-term
investments was $7,560,195.  At June 29, 2008, the fair value of
short-term investments was $6,274,274.  Non-current investments are
marketable securities which primarily consist of telecommunications stocks and a
mutual fund that invests in mortgage backed securities.  Unrealized
gains and losses are reported as a component of accumulated other comprehensive
earnings in Stockholders’ Equity.
 
 As of
June 28, 2009, the Company had $80,224 of gross unrealized gains from its
investments in federal agency mortgage backed securities which had a fair value
of $2,908,610.  As of June 29, 2008, $21,129 gross unrealized losses
were from its
investments in federal agency mortgage backed securities which had a fair value
of $2,673,962.  The Company’s investments were was
follows:
   -23-
  Original
                              
                              
                              Unrealized
                              
                              
                              Unrealized
                              
                              
                              FairCost
                              
                              
                              Gain
                              
                              
                              Loss
                              
                              
                              ValueJune
      28, 2009Equity
      securities
                              
                              $
                              710,799
                              
                              
                              $
                              2,588,149
                              
                              
                              $
                              (13,288
                              )
                              
                              $
                              3,285,660Mutual
      fund
                              
                              
                              2,828,386
                              
                              
                              
                              80,224
                              
                              
                              
                              -
                              
                              
                              
                              2,908,610Certificates
      of deposits
                              
                              
                              7,560,195
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              7,560,195June
      29, 2008Equity
      securities
                              
                              $
                              710,799
                              
                              
                              $
                              3,623,502
                              
                              
                              $
                              -
                              
                              
                              $
                              4,334,301Mutual
      fund
                              
                              
                              2,695,091
                              
                              
                              
                              -
                              
                              
                              
                              (21,129
                              )
                              
                              
                              2,673,962Certificates
      of deposits andU.
      S. Treasury securities
                              
                              
                              6,274,274
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              6,274,274
 During
fiscal 2009, the Company had certain equity securities with cumulative
unrealized losses of $13,288.  Management believes the unrealized
losses are temporary and the Company has the ability and intent to hold these
securities long enough to recover its investment.
 
 Less than 12 months
                                        
                                        
                                        12 Months or greater
                                        
                                        
                                        TotalJune
      28,2009
                                        
                                        Fair
                                          Value
                                        
                                        
                                        Unrealized
                                          loss
                                        
                                        
                                        Fair
      Value
                                        
                                        
                                        Unrealized
                                          loss
                                        
                                        
                                        FairValue
                                        
                                        
                                        Unrealized
                                          lossEquity
      securities
                                        
                                        $
                                        44,200
                                        
                                        
                                        $
                                        (13,288
                                        )
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        44,200
                                        
                                        
                                        $
                                        (13,288
                                        )
 
 The
equity securities portfolio includes the following telecommunications
stocks:
  82,112
shares of AT&T
 2,000
shares of Embarq
 354
shares of Fairpoint Communications
 939
shares of Idearc
 475
shares of LSI
 9,969
shares of Qwest
 40,000
shares of Sprint Nextel
 18,784
shares of Verizon
 11,865
shares of Vodafone
 4,079
shares of Windstream
 
 There
were no sales or exchanges of holdings in the year ended June 28,
2009.  In the year ended June 29, 2008, the Company recorded a pre-tax
gain of $267,237 from the
combination of the sale of its holdings in Alltel and the mandatory conversion
of Avaya stock for cash.
 
 -24-
 As stated
in Note 1, the Company values certain assets in accordance with the Statement of
Financial Accounting Standards No. 157 (“SFAS 157”), “Fair Value
Measurements”.  SFAS 157 establishes a three-tier fair value
hierarchy, which prioritizes the inputs used in measuring fair value as
follows:
 
 Level
      1.
                  Observable
      inputs such as quoted prices in active markets for
      identicalassets
      or liabilities;
 Level
      2.
                  Inputs,
      other than the quoted prices in active markets, that areobservable
      either directly or indirectly; and
 Level
      3.
                  Unobservable
      inputs in which there is little or no market data, whichrequire
      the reporting entity to develop its own
  assumptions.
 
 The fair
value of these assets as of June 28, 2009 is as follows:
 
 Quoted
                          
                          
                          Significant
                          
                          
                          
                          
                          
                          Unrealized
                          
                          
                          CumulativePrice
      for
                          
                          
                          Other
                          
                          
                          Significant
                          
                          
                          gains/(losses)
                          
                          
                          UnrealizedIdentical
                          
                          
                          Observable
                          
                          
                          Unobservable
                          
                          
                          for
      the
                          
                          
                          gains/(losses)Assets
                          
                          
                          Inputs
                          
                          
                          Inputs
                          
                          
                          Year
      Ended
                          
                          
                          as
      ofDescription
                          
                          (Level 1)
                          
                          
                          (Level 2)
                          
                          
                          (Level 3)
                          
                          
                          June 28,2009
                          
                          
                          June 28, 2009Equity
      securities
                          
                          $
                          3,285,660
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          (1,048,641
                          )
                          
                          $
                          2,574,861Mutual
      fund
                          
                          
                          2,908,610
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          101,353
                          
                          
                          
                          80,224Certificates
      of deposits
                          
                          
                          -
                          
                          
                          
                          7,560,195
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -TOTAL
                          
                          $
                          6,194,270
                          
                          
                          $
                          7,560,195
                          
                          
                          
                          -
                          
                          
                          $
                          (947,288
                          )
                          
                          $
                          2,655,085
  The fair
value of certificates of deposits is estimated using net present value
techniques and comparing the values to certificates with similar
terms.
 
 4.
                  LAND,
      BUILDINGS, AND EQUIPMENT
  Land,
buildings, and equipment, as cost, consisted of the following:
  June
      28,
                                    
                                    
                                    June
      29,2009
                                    
                                    
                                    2008___Buildings
                                    
                                    $
                                    17,541,393
                                    
                                    
                                    $
                                    17,541,393Leasehold
      and building improvements
                                    
                                    
                                    7,250,953
                                    
                                    
                                    
                                    7,031,329Bowling
      lanes and equipment
                                    
                                    
                                    22,136,136
                                    
                                    
                                    
                                    22,079,218Land
                                    
                                    
                                    10,590,450
                                    
                                    
                                    
                                    10,590,450Amusement
      games
                                    
                                    
                                    834,396
                                    
                                    
                                    
                                    844,343Bowling
      lanes and equipment not yet in use
                                    
                                    
                                    325,456
                                    
                                    
                                    
                                    171,63058,678,784
                                    
                                    
                                    
                                    58,258,363Less
      accumulated depreciation andamortization
                                    
                                    
                                    34,957,864
                                    
                                    
                                    
                                    33,397,603$
                                    23,720,920
                                    
                                    
                                    $
                                    24,860,760
 
 Depreciation
and amortization expense for buildings and equipment for fiscal
years 2009 and 2008 was $1,726,854, and $1,764,226, respectively. No
depreciation expense was recorded for Bowl America Falls Church during the
period when it was closed. The Company includes construction in progress costs
in the bowling lanes and equipment not yet in use category until completion of
the project.  Bowling lanes and equipment not yet in use are not
depreciated.
  -25-
 5.
                  COMMITMENTS
      AND CONTINGENCIES
  In
February 2007, the Company temporarily closed an existing bowling center in Falls
Church, Virginia when its roof was damaged by an ice storm.  The center
reopened on March 31, 2008.  The Company’s business interruption
insurance covered the lost income of the center while repairs were being made
and during a business restoration period after reopening.  During
fiscal 2009 final settlement of the loss, totaling $1,501,000 was
received.  In fiscal years 2009 and 2008, $261,100 and $800,000,
respectively, were recognized as recoveries and a receivable of $1,240,000 is
included in Prepaid expenses and other on the Consolidated Balance Sheets at
June 29, 2008.
 
 Lease
Commitments
  The
Company and its subsidiaries are obligated under long-term real estate lease
agreements for two bowling centers.  Certain of the Company's real estate
leases provide for additional annual rents based upon total gross revenues
and increases in real estate taxes and insurance.
 
 At June
28, 2009, the minimum fixed rental commitments related to all non-cancelable
leases, were as follows:
  Year
      Ending2010
                                    
                                    $
                                    286,4392011
                                    
                                    
                                    288,0002012
                                    
                                    
                                    288,0002013
                                    
                                    
                                    288,0002014
                                    
                                    
                                    280,667Thereafter
                                    
                                    
                                    1,166,667Total
      minimum lease payments
                                    
                                    $
                                    2,597,773
  Net rent
expense was as follows:
  For
      the Years EndedJune
      28,
                                        
                                        
                                        June
      29,2009
                                        
                                        
                                        2008Minimum
      rent under operating leases
                                        
                                        $
                                        264,881
                                        
                                        
                                        $
                                        272,950Excess
      percentage rents
                                        
                                        
                                        20,291
                                        
                                        
                                        
                                        4,744$
                                        285,172
                                        
                                        
                                        $
                                        277,694
 
 Purchase
Commitments
  The
Company's purchase commitments at June 28, 2009 are for materials, supplies,
services and equipment as part of the normal course of business.
 
 6.
                  PROFIT-SHARING
      AND ESOP PLAN
  The
Company has two defined contribution plans.  The first is a profit- sharing
plan which, generally, covers all employees who on the last day of the fiscal
year or December 29 have been employed for one year with at least one thousand
hours of service.  The Plan provides for Company contributions as determined
by the Board of Directors.  For the years ended June 28, 2009, and June
29, 2008, contributions in the amount of $120,000, and $125,000, respectively,
were charged to operating expense.
 
 Effective
March 31, 1987, the Company adopted an Employee Stock Ownership Plan
(ESOP) which generally covers all individuals who were employed at the end of
the fiscal year and had one thousand or more hours of service during that
fiscal year.  The Plan provides for Company contributions as
determined by the
Board of Directors.  For fiscal year 2009, the Company contributed
10,000 shares of Bowl America common stock to the Plan, valued at $123,600 based
on the market
price on the date of contribution.  For fiscal year 2008 a cash
contribution of $125,000 was made.
 
 -26-
 The
Company has no defined benefit plan or other post retirement plan.
 
 7.
                  INCOME
      TAXES
  Financial
Accounting Standards Board Interpretation (FIN) No. 48, “Accounting for
Uncertainty in Income Taxes” was issued in July 2006 and interprets SFAS No.
109, “Accounting for Income Taxes”.  FIN 48 requires all taxpayers to
analyze all material positions they have taken or plan to take in all tax
returns that have been filed or should have been filed with all taxing
authorities for all years still subject to challenge by those taxing
authorities.  If the position taken is “more-likely-than-not” to be
sustained by the  taxing authority on its technical merits and if
there is more than a 50% likelihood that the position would be sustained if
challenged and considered by the highest court in the relevant jurisdiction, the
tax consequences of that position should be reflected in the taxpayer’s GAAP
financial statements.  Earlier proposed interpretations of SFAS 109
had recommended a “probable” standard for recognition of tax consequences rather
than the “more-likely-than-not” standard finally adopted.
 
 The
Company was required to implement FIN 48 on July 2,
2007.  Consequently, the Company analyzed its tax positions and
determined that no material tax positions recognition criteria are different
under the new standard.  The Company had no material unrecognized tax
benefits at June 28, 2009 nor does it expect any significant change in that
status during the next twelve months.  No accrued interest or
penalties on uncertain tax positions have been included on the consolidated
statements of earnings and comprehensive earnings or the consolidated balance
sheet.  Should the Company adopt tax positions for which it would be
appropriate to accrue interest and penalties, such costs would be reflected in
the tax expense for the period in which such costs accrued.  The
Company is subject to U.S. Federal income tax and to several state and foreign
jurisdictions.  Returns filed for tax periods ending after July 3,
2005 are still open to examination by those relevant taxing
authorities.
 
 The
significant components of the Company's deferred tax assets and liabilities
were as follows:
  June
      28,
                                
                                
                                June
      29,2009
                                
                                
                                2008Deferred
      tax:Land,
      buildings, and equipment
                                
                                $
                                1,209,038
                                
                                
                                $
                                1,259,692Unrealized
      gain on available-for-sale
      securities
                                
                                
                                1,011,587
                                
                                
                                
                                1,356,702Prepaid
      expenses and other
                                
                                
                                (26,828
                                )
                                
                                
                                (26,391
                                )Deferred
      tax liabilities
                                
                                $
                                2,193,797
                                
                                
                                $
                                2,590,003
 
 Income
tax expense differs from the amounts computed by applying the U.S. Federal
income tax rate to income before tax for the following reasons:
  For
      the Years Ended2009
                                      
                                      
                                      2008Taxes
      computed at statutory rate
                                      
                                      
                                      34.0
                                      %
                                      
                                      
                                      34.0
                                      %State
      income taxes, net of Federal income taxbenefit
                                      
                                      
                                      2.8
                                      
                                      
                                      
                                      3.8Dividends
      received exclusion
                                      
                                      
                                      (1.9
                                      )
                                      
                                      
                                      (2.5
                                      )All
      other net
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (.3
                                      )34.9
                                      %
                                      
                                      
                                      35.0
                                      %
 
 -27-
 8.
                  STOCKHOLDERS'
      EQUITY
  The Class
A shares have one vote per share voting power.  The Class B shares
may vote ten votes per share and are convertible to Class A shares at the
option of the stockholder.
 
 At June
28, 2009, and June 29, 2008, the Company had $39,093 in employee loans
related to the issuance of shares.  These loans are secured by the shares of
the Company's common stock acquired and are full recourse notes. The notes
bear interest at rates of 3 1/2% to 5% and are payable over a term of three
years from the date of the agreements which range from 2007 to 2008. These
employee loans have been recorded as a reduction of additional
paid-in
 capital.
 
 9.
                  DEFERRED
      COMPENSATION
  Deferred
compensation payable was a total of $56,624 at June 28, 2009, and $62,734 at
June 29, 2008.  The current portion of these amounts is $5,216 at June
28, 2009, and $8,113 at June 29, 2008, and is included in accrued
expenses.
  
 -28-