What was the current portion of deferred revenue for Chocolate Bash as of December 31, 2021?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
2023 & DECEMBER 31, 2022 & DECEMBER 31, 2021 BALANCE SHEET
| ASSETS | 12/31/23 12/31/22 12/31/21 | ||
|---|---|---|---|
| CURRENT ASSETS | |||
| Cash and Cash Equivalents | $ 21,639 | $ 59,295 | $ 104,922 |
| Accounts Receivable | 2,153 | 21,194 | - |
| TOTAL CURRENT ASSETS | 23,792 | 80,489 | 104,922 |
| NON-CURRENT ASSETS | |||
| Due To/From Related Party | 35,956 | - | - |
| TOTAL NON-CURRENT ASSETS | 35,956 | - | - |
| TOTAL ASSETS | 59,748 | 80,489 | 104,922 |
| LIABILITIES AND OWNER'S EQUITY | |||
| CURRENT LIABILITIES | |||
| Deferred Revenue, current portion | 7,146 | 3,500 | 24,750 |
| TOTAL CURRENT LIABILITIES | 7,146 | 3,500 | 24,750 |
| NON-CURRENT LIABILITIES | |||
| Deferred Revenue | 51,729 | 30,479 | 32,250 |
| TOTAL NON-CURRENT LIABILITIES | 51,729 | 30,479 | 32,250 |
| TOTAL LIABILITIES | 58,875 | 33,979 | 57,000 |
| OWNER'S EQUITY | |||
| Retained Earnings (Deficit) | (14,611) 17,822 | 9,114 | |
| Net Income (Loss) | 15,483 | 28,687 | 38,808 |
| TOTAL SHAREHOLDERS' EQUITY | 872 | 46,509 | 47,922 |
| TOTAL LIABILITIES |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the current portion of deferred revenue as of December 31, 2021, was $24,750. Deferred revenue represents payments Chocolate Bash has received for goods or services that have not yet been fully earned. In this case, it likely relates to franchise fees or other payments received from franchisees for which Chocolate Bash has not yet provided the complete services or fulfilled their obligations. The current portion represents the amount expected to be recognized as revenue within the next year.
For a prospective Chocolate Bash franchisee, this figure provides insight into the company's financial obligations and revenue recognition practices. A higher deferred revenue balance could indicate strong future revenue potential as Chocolate Bash fulfills its obligations to franchisees. It also reflects the company's ability to generate upfront payments.
However, it's important to note that deferred revenue is a liability on the balance sheet, representing Chocolate Bash's obligation to provide future services. Changes in deferred revenue from year to year can also reflect the pace of new franchise sales and the timing of revenue recognition. Franchisees should consider this information in conjunction with other financial metrics to assess the overall financial health and stability of Chocolate Bash.