What was the purchase of property and equipment for Mr. Sandless in the year ended December 31, 2023?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
4,122 and $82,500, 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, 2023, and 2022, the amount due to a related party was $0 and $300, 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 charged to expense as incurred. Property and equip
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 41–42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the book value of property and equipment, which includes assets like office equipment, computer equipment, and automobiles, was $64,898 as of December 31, 2023. This figure represents the cost of these assets less accumulated depreciation. The corresponding book value at the end of the previous year, December 31, 2022, was $7,290.
The difference between these two book values does not directly represent the purchase amount of property and equipment during 2023. It reflects the net change in the value of these assets, considering both new purchases and depreciation. Depreciation expense for the year ended December 31, 2023, was $11,069. Depreciation is calculated using the straight-line method over an estimated useful life of five years.
To determine the actual amount Mr. Sandless invested in property and equipment purchases during 2023, one would need to consider both the change in book value and the depreciation expense. The increase in book value from $7,290 to $64,898, combined with the depreciation expense of $11,069, suggests that the company invested significantly in new property and equipment during the year. However, the FDD does not provide the exact purchase amount.
A prospective franchisee should request a detailed breakdown of the property and equipment purchases from Mr. Sandless to fully understand the capital expenditures made during 2023. This information is essential for assessing the company's investment activities and financial health.