What was the total amount of employee retention credit receivable for Cinch I.T.?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
er 31, 2019 and 2020 were discovered during the current year. Accordingly, an adjustment of $21,198 was made to increase receivables – trade for the year ended December 31, 2020.
In 2021 the Company applied for the Employee Retention Credit ("ERC") established by the CARES Act in the amount of $38,487. The tax credit applies to payroll taxes paid during the year ended December 31, 2020. The credit is expected to be received in the year ended December 31, 2022 and is included as a long-term receivable on the balance sheet and as extraordinary income in the statements of operations and member's deficit due to the unprecedented nature of COVID-19.
The net ef
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the company applied for the Employee Retention Credit (ERC) established by the CARES Act in 2021. The total amount applied for was $38,487. This tax credit was applicable to payroll taxes paid during the year ending December 31, 2020. The FDD states that Cinch I.T. expected to receive the credit in the year ending December 31, 2022, and it was recorded as a long-term receivable on the balance sheet and as extraordinary income due to the unprecedented nature of COVID-19.
The net effect of restatement on net loss and member's deficit was a decrease in net loss of $32,487 and an increase in member's deficit of $53,685 for the year ended December 31, 2020.
For a prospective Cinch I.T. franchisee, this information provides insight into how the company managed its finances during the COVID-19 pandemic and took advantage of government relief programs. It also shows how such credits were accounted for in their financial statements, specifically as a long-term receivable and extraordinary income. Understanding these past financial decisions can help a franchisee assess the financial stability and management acumen of Cinch I.T.