What was the amount of the LIFO reserve for Cornwell Quality Tools in 2022?
Cornwell_Quality_Tools Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2022 | 2021 | |
|---|---|---|
| Raw materials | $ 5,882,360 | $ 6,198,060 |
| Work in process | 3,503,205 | 3,427,525 |
| Finished goods | 40,537,244 | 29,744,156 |
| 49,922,809 | 39,369,741 | |
| Less: Obsolescence reserve | 392,256 | 280,000 |
| $ 49,530,553 | $ 39,089,741 |
The income tax effect has been provided on the increase/decrease in inventory value at the statutory federal and state tax rates. The tax effect deferred tax assets by $2,459,000 in 2022 and $1,774,000 in 2021. The tax effect increased the provision for income taxes by $685,000 in 2022 and $387,000 in 2021.
The Company uses
Source: Item 23 — RECEIPT (FDD pages 101–373)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the excerpts provided do not contain the specific amount of the LIFO reserve for Cornwell Quality Tools in 2022. However, the document does mention that Cornwell Quality Tools uses the LIFO (last-in, first-out) method for its historical consolidated financial statements.
The excerpts discuss the income tax effects related to inventory valuation. For example, one excerpt mentions that the tax effect increased the provision for income taxes by $685,000 in 2022. Another excerpt states that the tax effect deferred tax assets by $2,459,000 in 2022.
To determine the LIFO reserve amount for Cornwell Quality Tools in 2022, a prospective franchisee should review the complete audited financial statements included in the FDD or ask the franchisor directly for this information. Understanding the LIFO reserve can help a franchisee better assess the company's inventory valuation and its potential impact on profitability.