What was the depreciation expense for Mr. Sandless in 2021?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
was $82,500 and $110,000, respectively.
The Company periodically receives funds from its members' or related companies. These advances are due on demand and do not bear interest. As of December 31, 2022, and 2021, the amount due to a related party was $300 and $14,224, respectively.
6. PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the asset, which is five years. Expenditures for repairs and maintenance are charge
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 41–42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the depreciation expense for the year ending December 31, 2021, was $14,091. This figure reflects the accounting expense recognized for the reduction in value of Mr. Sandless's property and equipment during that year.
Depreciation is calculated using the straight-line method over an estimated useful life of five years for assets like office equipment, computer equipment, and automobiles. This means the cost of these assets is evenly spread out as an expense over five years. For a prospective franchisee, understanding depreciation is important for assessing the profitability and financial health of Mr. Sandless. It provides insight into how the company manages its assets and accounts for their wear and tear.
It's also worth noting that these financial statements are audited, providing an additional level of assurance regarding their accuracy. The independent auditor's report confirms that the financial statements present fairly the financial position of Mr. Sandless in accordance with accounting principles generally accepted in the United States of America.