What depreciation methods are used for furniture and equipment by Coffee News?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
| Furniture and equipment consist of the following: | 2024 | 2023 | 2022 | |
|---|---|---|---|---|
| Furniture and equipment | $5,940 $ | 107,657 | $107,657 | |
| Less accumulated depreciation | (5,940) | (75,792) | (68,680) | |
| $ | - $ | 31,865 | $38,977 |
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, the company's furniture and equipment, along with accumulated depreciation, are detailed in the financial statements. In 2024, the furniture and equipment were valued at $5,940, with an equal amount recorded as accumulated depreciation, resulting in a net value of $0. In 2023, the furniture and equipment were valued at $107,657, with accumulated depreciation of $75,792, resulting in a net value of $31,865. For 2022, the furniture and equipment were also valued at $107,657, with accumulated depreciation of $68,680, resulting in a net value of $38,977.
The FDD does not specify the exact depreciation method (e.g., straight-line, accelerated) used by Coffee News. The table only provides the total accumulated depreciation for each year, without detailing the annual depreciation expense or the method used to calculate it. Understanding the depreciation method is important for a franchisee to project the tax implications related to asset depreciation.
A prospective Coffee News franchisee should ask the franchisor for more detailed information about the depreciation methods used for furniture and equipment. This information is crucial for accurate financial forecasting and tax planning. Specifically, franchisees should inquire about the useful lives assigned to different asset categories and whether the company uses the straight-line method, an accelerated method, or another permissible method for calculating depreciation expense.