As of December 31, 2022, did Deck Medic find it necessary to have an allowance for doubtful accounts?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
The Year (14,613) | (14,261) | | Cash and cash equivalents - beginning of the year 125,496 | 139,757 | | Cash And Cash Equivalent - End of The Year $ 110,883 | $ 125,496 |
Deck Medic, Inc. December 31, 2022 and 2021 Notes To Financial Statements
1. COMPANY AND NATURE OF OPERATIONS
Deck Medic, Inc. (the "Company") is a franchise Company that was incorporated on January 20, 2016 under the laws of the State of Illinois for the purpose of offering franchise opportunities to entrepreneurs who want to own and operate their own Deck Medic, Inc.'s operations as a franchise. The Company offers qualified individuals the right to operate a business that provides outdoor wood restorations (decks, fences, etc.), and power washing services, and related services and products under "Deck Medic" mark. Deck Medic has proprietary stains, strippers, & cleaners that are only available to the Company's franchise owners.
The Company is an affiliate of Deck Medic Supplies, Inc., an Illinois corporation that was established on January 10, 2017. This affiliate provides certain inventory items, including the Starter Kit and semi-transparent oil-based stains and stripping/cleaning products. This affiliate has not in the past and does not now offer franchises in any lines of business.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Company's financial statements. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of financial statements.
A. Basis of Accounting
The Company's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP").
B.
Source: Item 23 — RECEIPTS (FDD pages 43–228)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, it is not possible to determine whether Deck Medic found it necessary to have an allowance for doubtful accounts as of December 31, 2022. While the FDD includes the company's financial statements and auditor's report, it does not specifically mention or detail any allowance for doubtful accounts. The notes to the financial statements describe the company's accounting policies, including those for cash and cash equivalents, but there is no mention of policies or practices related to doubtful accounts.
An allowance for doubtful accounts is a contra-asset account used to estimate the amount of accounts receivable that a company may not be able to collect. It reflects the risk that some customers will not pay their invoices. The absence of specific information about this allowance in Deck Medic's financial statements could mean either that the company did not have a material amount of uncollectible receivables or that the information was not disclosed separately in the provided excerpts.
A prospective Deck Medic franchisee should inquire directly with the franchisor about their policies and practices regarding accounts receivable and the allowance for doubtful accounts. Understanding how Deck Medic manages credit risk and potential uncollectible accounts is important for assessing the financial health and stability of the franchise system.