What was the restated amount for Member's deficit for Cinch I.T. as of December 31, 2020?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
| Printer Local Special Science and | 2021 | Restated 2020 | |
|---|---|---|---|
| ENTRAORDINARY INCOME | 5 | 32,487 | |
| Employee Retention Credit | |||
| Paycheck Protection Program loan forgiveness | 3 | 78,135 | 52,407 |
| TOTAL EXTRAORDINARY INCOME | 78.135 | 32,487 | |
| NET INCOME (LOSS) | _ | 135.270 | (106.565) |
| MEMBER'S DEFICIT, BEGINNING OF YEAR - | (186,133) | (100.766) | |
| AS PREVIOUSLY REPORTED | |||
| PRIOR PERIOD ADJUSTMENT - | 6 | 21.198 | |
| Correction of an error | |||
| MEMBER'S DEFICIT, BEGINNING OF YEAR - | (186,133) | (79,568) | |
| AS ADJUSTED | |||
| MEMBER'S DEFICIT, END OF YEAR | 5_ | (50,863) S | (186,133) |
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the restated member's deficit at the beginning of the year as adjusted for December 31, 2020, was ($79,568). The member's deficit at the end of the year for 2020 was ($186,133). These figures reflect adjustments made due to the correction of errors.
Specifically, a prior period adjustment of $21,198 was made to correct an error. The net effect of the restatement decreased the net loss by $32,487 and increased the member's deficit by $53,685 for the year ending December 31, 2020.
Potential franchisees should be aware of these restatements and their implications on the financial statements. Understanding the reasons behind these adjustments is crucial for assessing the financial health and stability of Cinch I.T. It is advisable to seek clarification from the franchisor regarding the nature of the errors and the reasons for the adjustments to make an informed investment decision.