What was the total amount of deferred revenue (current) for Bombs Away?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
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BOMBS AWAY FRANCHISING LLC BALANCE SHEET DECEMBER 31, 2023
| ASSETS | ||
|---|---|---|
| CURRENT ASSETS | ||
| Cash and Cash Equivalents | $ 5,000 | |
| Accounts Receivable | 515 | |
| TOTAL CURRENT ASSETS | 5,515 | |
| NON-CURRENT ASSETS | ||
| TOTAL NON-CURRENT ASSETS | - | |
| TOTAL ASSETS LIABILITIES AND OWNER'S EQUITY | 5,515 | |
| CURRENT LIABILITIES | ||
| Deferred Revenue (current) | 9,000 | |
| TOTAL CURRENT LIABILITIES | 9,000 | |
| NON-CURRENT LIABILITIES | ||
| Deferred Revenue | 6,000 | |
| Due to Related Party | 59,397 | |
| TOTAL NON-CURRENT LIABILITIES | 65,397 | |
| TOTAL LIABILITIES | 74,397 | |
| OWNER'S EQUITY | ||
| Retained Earnings | (41,721) | |
| Net Income (Loss) | (27,161) | |
| TOTAL SHAREHOLDERS |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the company's balance sheet as of December 31, 2022, shows a breakdown of assets, liabilities, and owner's equity. Under current liabilities, Bombs Away reported deferred revenue (current) of $9,000. This means that as of the end of 2022, Bombs Away had received $9,000 for services or products that had not yet been delivered or recognized as revenue.
Deferred revenue represents a liability on Bombs Away's balance sheet because the company has an obligation to provide future services or products for which it has already been paid. This is a common accounting practice, especially in franchise systems where initial franchise fees or ongoing royalties may be collected before the related services are fully rendered.
For a prospective Bombs Away franchisee, this figure indicates the company's financial obligations and how it manages its revenue recognition. It's important to understand how deferred revenue impacts the overall financial health of the franchisor, as it reflects future service obligations. A significant change in deferred revenue from year to year could signal changes in sales, service delivery, or accounting practices, and should be examined carefully.