What was the net income for Burros Fries according to the financial statements?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
alties expense, respectively.
NOTE 5– CORRECTION OF ERRORS
The accompanying financial statements of Burros & Fries Franchise, Inc. have been restated to correct errors made in the prior year. The errors relate to overstatement franchise fees of revenues and understatement of legal expenses and amortization and an understatement of income tax provision. The net result was an overstatement of net income of $50,249, after effect of income taxes. Ending retained earnings at December 31, 2020 have been adjusted b
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries FDD, the financial statements of Burros & Fries Franchise, Inc. have been restated to correct errors made in the prior year. These errors included an overstatement of franchise fees of revenues, an understatement of legal expenses and amortization, and an understatement of income tax provision. The net result of these corrections was an overstatement of net income of $50,249, after the effect of income taxes.
This restatement also led to an adjustment of the ending retained earnings at December 31, 2020, by $82,077 to reflect the effect of the restatement on the prior year. This means that the previously reported net income for the period was inaccurate and has been revised to provide a more accurate financial picture.
Prospective franchisees should be aware of these corrections as they evaluate the financial performance of Burros Fries. Understanding the reasons behind the restatement and the magnitude of the adjustments is crucial for making informed investment decisions. It would be prudent to inquire about the specific details of these errors and the measures Burros Fries has taken to prevent similar issues in the future.