What was the accumulated depreciation for Deka Lash's property and equipment on 2/31/2022?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
s used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgement, there are conditions or events, considered in the aggregate, that raise substantial doubt about DL Franchising, LLC's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, amount other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
The Mumford Group Bountiful, Utah
February 24, 2024
| 1 | 2/31/2023 | . 1 | 2/31/2022 | 7 1 | 12/31/2021 | |
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash and cash equivalents Accounts receivable, net of allowance for doubtful | $ | 402,347 | S | 415,665 | 5 | 507,842 |
| accounts of $28,000, $6,718 and $6,718, respectively | 250,199 | 716,829 | 420,834 | |||
| Prepaid expenses | 139,044 | 186,830 | 293,204 | |||
| Inventory | 662,468 | 751,095 | 884,592 | |||
| Accrued interest - notes receivable | 1.618 | |||||
| Notes receivable - related parties | 514,485 | 99,990 | 14,470 | |||
| Current portion of notes receivable | 13,414 | 29,950 | ||||
| Current maturities of deferred direct franchising costs | _ | 569,298 | _ | 564,211 | _ | 510,978 |
| T |
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the accumulated depreciation for property and equipment as of 2/31/2022 was $101,144. This figure reflects the total depreciation recognized on Deka Lash's property and equipment up to that date. Note that February 31 is not a valid date, so the FDD likely contains a typo and means February 28, 2022.
Accumulated depreciation is a contra-asset account that reduces the book value of assets on a company's balance sheet. It represents the cumulative amount of depreciation expense that has been recognized over the asset's life. For a Deka Lash franchisee, understanding accumulated depreciation is important for assessing the net value of the franchise's assets and for financial planning purposes.
The FDD also provides the cost of property and equipment, which was $200,047 as of 2/31/2022. The net value of property and equipment (cost less accumulated depreciation) was $98,903. This net value is what would be reflected on the balance sheet. Depreciation expense for the year ending December 31, 2022, was $13,439.
Prospective franchisees should pay close attention to these figures as they provide insight into the financial management and asset valuation practices of Deka Lash. Understanding how depreciation is calculated and reported can help franchisees make informed decisions about their investment and financial performance.