What was the total accumulated depreciation for all assets owned by Craters & Freighters as of December 31, 2022?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
i LLP
Denver, Colorado April 10, 2024
Balance Sheets
| As of December 31, | 2023 | 2022 |
|---|---|---|
| Current Assets: | ||
| Cash and Cash Equivalents | $ 6,991,649 $ | 2,376,316 |
| Marketable Securities - At Fair Market Value | 634,869 | 528,625 |
| Accounts Receivable - Net of Allowance for | ||
| Credit Losses of $50,000 and $40,000, Respectively | 569,660 | 717,990 |
| Prepaid Expenses | 201,226 | 34,611 |
| Total Current Assets | 8,397,404 | 3,657,542 |
| Property and Equipment - At Cost: | ||
| Office Equipment | 80,614 | 80,613 |
| Furniture and Fixtures | 19,862 | 19,863 |
| Leasehold Improvements | 11,415 | 11,415 |
| Vehicles | 202,688 | 215,039 |
| 314,579 | 326,930 | |
| Less: Accumulated Depreciation | (133,628) | (225,263) |
| Property and Equipment - Net | 180,951 | 101,667 |
| Other Assets: | ||
| Software Development - Net of Accumulated | ||
| Amortization of $317,185 and $215,196, Respectively | 153,931 | 142,272 |
| Due from Related Party | 356,391 | 193,314 |
| Note Receivable | 160,000 | 60,000 |
| Right-of-Use Asset - Operating Lease | 130,071 | 203,307 |
| Deposits | 12,546 | 12,546 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, as of December 31, 2022, the total accumulated depreciation for property and equipment was $225,263. This figure represents the cumulative depreciation of Craters & Freighters' assets, including office equipment, furniture and fixtures, leasehold improvements, and vehicles. The original cost of these assets totaled $326,930. After subtracting the accumulated depreciation, the net book value of Craters & Freighters' property and equipment was $101,667.
Accumulated depreciation is a contra-asset account that reduces the book value of an asset over its useful life. It reflects the amount of an asset's cost that has been expensed as depreciation since the asset was put into service. For Craters & Freighters, this means that a significant portion of their initial investment in assets like vehicles and equipment has already been accounted for as an expense on their income statement.
Prospective franchisees should understand that depreciation is a non-cash expense, meaning it does not involve an actual outflow of cash. However, it does reduce taxable income, which can lower income tax obligations. Monitoring accumulated depreciation can help franchisees assess the age and condition of Craters & Freighters' assets and plan for future capital expenditures to replace aging equipment. Reviewing these figures over several years can reveal trends in Craters & Freighters' investment and asset management strategies.
It is important to note that in addition to the accumulated depreciation for property and equipment, Craters & Freighters also reports accumulated amortization for software development costs. As of December 31, 2022, this amounted to $215,196. Amortization is similar to depreciation but applies to intangible assets like software. The net value of software development after accounting for amortization was $142,272. Therefore, when evaluating the overall financial health of Craters & Freighters, it is important to consider both accumulated depreciation and accumulated amortization.