What is the allowance for doubtful accounts related to notes receivable for Apricot Lane?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
er 31, 2023 and 2022 of $627,500 and $1,170,500 respectively.
| Note receivable, due in three installments, secured | $ | 369,842 | $ | 369,842 | |
|---|---|---|---|---|---|
| by certain real estate located in Louisiana, matured | |||||
| January 15, 2019 bearing interest at 9%. This note | |||||
| is in default. | |||||
| Note receivable, due in twenty-three monthly installments beginning in March, 2018, and matured in February, 2020, secured by certain real estate located in Louisiana, bearing interest at 9%. | |||||
| This note is in default. | 737,692 | 737,692 | |||
| 110000000000000000000000000000000000000 | 1,107,534 | 1,107,534 | |||
| Less: Allowance for doubtful accounts | (122,269) | (122,269) |
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, the allowance for doubtful accounts related to notes receivable was $122,269. This figure represents the company's estimate of the portion of outstanding notes receivable that may not be collectible.
The notes receivable are related to two specific notes, both secured by real estate in Louisiana and bearing a 9% interest rate. Both notes are currently in default. Despite the default, Apricot Lane's management believes sufficient collateral exists to cover the notes, and they consider the notes fully collectible. However, the allowance for doubtful accounts is established to account for the time value of money, reflecting an expected delay in payment.
This allowance reduces the total reported value of the notes receivable on Apricot Lane's balance sheet. The total notes receivable before the allowance is $1,107,534, which is reduced to a net value of $985,265 after deducting the $122,269 allowance. This accounting practice provides a more conservative and realistic view of the company's assets, acknowledging the potential risk of delayed payments even when full collection is ultimately expected.