What was the net amount of accounts receivable, after allowance for doubtful accounts of $109,133, for Carbones Pizzeria?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
dentified during the audit.
Arcadia, California
May 31, 2024
M&T PIZZA INCORPORATED AND SUBSIDIARIES Consolidated Balance Sheet October 31, 2023
Assets
| Cash and cash equivalents | $ 161,252 |
|---|---|
| Accounts receivable, net of allowance for doubtful accounts of $109,133 | 287,928 |
| Due from stockholder | 492,605 |
| Accounts receivable, related party | 107,489 |
| Inventory | 3,650 |
| Prepaid expenses | 19,005 |
| Total current assets | 1,071,929 |
| Note receivable | 60,500 |
| Deferred tax assets | 13,000 |
| Property and equipment, net | 164,212 |
| Total assets | $ 1,309,641 |
| Liabilities and Stockholder's Equity | |
| Current liabilities: | |
| Loan payable, current portion | $ 29,854 |
| Accounts payable and accrued expenses | 31,744 |
| Income taxes payable | 113,000 |
| Total current liabilities | 174,598 |
| Loan payable, net of current portion | 13,592 |
| Total liabilities | 188,190 |
| Commitments and contingencies (Note 5) | |
| Stockholder's equity | |
| Common stock, $1.00 par value, 25,000 shares authorized, | |
| 2,500 shares issued and outstanding | 2,500 |
| Additional paid-in-capital | 266,117 |
| Retained earnings | 887,390 |
| Treasury stocks, at cost | (34,556) |
| Total stockholder's equity | 1,121,451 |
| Total liabilities and stockholder's equity | $ 1,309,641 |
**Consolidated
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the net accounts receivable, after accounting for an allowance for doubtful accounts of $109,133, was $287,928. This figure represents the amount of money owed to Carbones Pizzeria that is expected to be collected, after subtracting a provision for potential uncollectible accounts. This information is part of the consolidated financial statements for the company.
For a prospective Carbones Pizzeria franchisee, understanding the accounts receivable and the allowance for doubtful accounts is crucial. Accounts receivable typically arise from franchisee royalty and advertising fee payments that are not immediately paid. The allowance for doubtful accounts reflects the company's estimate of receivables that may not be collected due to various reasons such as franchisee financial difficulties. A higher allowance could indicate potential challenges in collecting payments from franchisees, which may reflect on the financial health of the franchise system.
The net accounts receivable figure is an important indicator of the company's financial health and its ability to manage credit risk. Franchisees should consider this information in conjunction with other financial data provided in the FDD to assess the overall stability and performance of Carbones Pizzeria. Reviewing trends in accounts receivable and the allowance for doubtful accounts over several years can provide additional insights into the company's financial management practices and the economic health of its franchisees.
It is also worth noting that the allowance for doubtful accounts is an estimate made by the management of Carbones Pizzeria, based on historical experience, current conditions, and forecasts. Actual results may differ from these estimates. Franchisees should consider discussing these figures with the franchisor to understand the factors influencing these estimates and the potential impact on the company's financial performance.