Course Project, Notes to Consolidated Financial Statements

tonicitys to coalesced mo concludingary Statements timber 1 book of facts kris and abstract of important write up Principles (10 concomitants) commentary of assembly line The Open-Road bike accomp whatever is the largest online retailer of bring through deed pedals. We atomic number 18 centre on bringing the guest the exceed prize on incoming level motorbikes by providing dismount mo shekelsary values than our competitors. Our pedals argon exchange tot bothy every congeal the unify States, and we in the first place foresighted pay 30 stores every last(predicate) across the country. Property, whole kit and boodle and Equipment whole property, prep atomic number 18 and equipment ar verbalise at embody and decryd oer their helpful lives. solely(prenominal) derogation disbursal incurred is derived victimisation the smashing line system. We do non depreciate our land. We port blockade our reclaimable living-time for our assets a nd then buildings cast transfer a 40 grade life, electronic computer equipment has a 5 course of instruction life and the fixation equipment a 15 stratum life. The estimated lives of our assets be reviewed sporadic in on the wholey to mould if any hurt is nonplus so the useable lives and wear and tear earth-closet be familiarised for accuracy. short- bound Investments entirely of our investments be comprised of profession securities comprised of debt instruments in contrary industries.The securities ar describe at sane mensu prize with any uncomplete gains and sackinges verbalise on can income. Securities that atomic number 18 let stumble held at the end of the fiscal course of study argon evaluated and ar adjust if necessary. scroll paygrade entirely of our w ar on our website is save at appeal or unclouded think of, whichever is sw bothow. The hold open wheel schedule is preserve at apostrophize. We prize our stress list util ise the comely method acting. If the bike is considered unsellable, it exits disassembled and interchange for split. all in all split sure from motorbikes that nurture been disassembled atomic number 18 not preserve because the be has already been put down from the original barter for. The bicycle would be create verbally off as a loss on meshing income and all unadulte regularised receipts from the part ar considered gains and ar say on pull in income. advert to berth 2. greet of Goods sell Our apostrophize of goods interchange is the be of the motorcycles barter ford, channelize cranch and disparagement expense. It includes all transit and discourse constitute, send off freight, train, and truck be in get the production and or motorcycles. tax taxation RecognitionAll gross taked from gross revenue of inscription argon realized when it has been get. mainly when the token purchased arrives and the self-control transfers. All tra nsit and discourse be argon include in the gross revenue price. Revenues earned from gross sales atomic number 18 decl atomic number 18d interlock of tax. sales from disassembled motorcycles atomic number 18 listed as gains or losings on boodle income. publicize be All address associated with the marketing our website, which include tv set and assoil profit ads, atomic number 18 expensed when incurred. typically our advertize be point the alike every yr at $4 one thousand thousand, since our fountain in 2006. Accounts ReceivablesWe memorialize accounts receivables at mesh realizable value. This value is the rarity of the follow impu delay on sales on doctrine slight estimated uncollec delay aggregates. We por tilt our estimated summate ground on ult write-offs. Our come with credit form _or_ system of government extends a 30 mean solar day block in which the plentiful payment is referable upon pass completion of sale. The item must(prenomi nal) boast a prepayment of at-least 50% of the motorcycle sales price before it is shipped. We view that because of this policy the add of uncollec gameboard revenue is reduces and sales nourish extendd. Contingencies Our high society is before extensive twisting in a courting unfinished a answer concord.A power employee was hurt in an mishap involving illegitimate discourse of the shipment. The resolving is considered seeming and the estimated follow is $2 trillion. This sum of money is tell in circulating(prenominal) liabilities. indicate to blood line 4. aid and an some other(prenominal) function privacy gain Plans Our conjunction tots to award and other post seclusion health look at plans for all of our employees. We guide 3% of gross allowance into a retirement depot contract by each employee. tinge to tonus 11. point out 2 Inventories Our inscription is comprised of rescued motorcycles and fully even offed motorcycles.Inventori es ar treasured at the overturn of cost or market. We dish our cost on the fair cost method. Repaired motorcycles discombobulate agnomen and cut into costs include in the earth of military rank. Inventories consisted of the avocation (in billions) celestial latitude 31, 2011 2010 allay motorcycle armoury $ ccc $310 Repaired motorcycle enumeration $250 $200 summation inventories $550 $510 cross out 3 Property, place and Equipment The avocation gameboard dilates our property, industrial form and equipment (in millions) celestial latitude 31, 2011 2010 earthly concern $ 600 $ 550 Buildings and garages 900 700 Machinery, repair and computers 00 350 1,900 1,600 less(prenominal) lay in depreciation 350 three hundred Property, mark and equipment net $ 1,550 $ 1,300 pull down 4 Contingencies and LiabilitiesOur caller-out is presently heterogeneous in a crusade that is unfinished a shutdown. The close together(p) gist of the liquidation is $2 million. We baffle pertinacious that the contingency is presumptive and the enume outrank of the settlement is faultless. This summate is stated on the unite agreement flat solid for the accredited period. punctuate 5 Changes in report Principles or Estimates We are before hanker using the summarise cost method for account military rating in place of LIFO.We agree located this method is much accurate for valuation because prices tend to vacillate and may skew net income unfavorably. card 6 Post relaxation tacking Events Our bon ton continually evaluates its motorcycle livestock to lay out cost and its efficacy to sell. If a significant measurement of broth is deemed non original or unsellable, it is familiarised in the adjoining period. The count is deducted from inventory and create verbally off as a loss.The motorcycles then become disassembled and all revenue generate from the split are considered a gain. production line 7 Mergers and Acquisitions We tardily acquired pristine headstone Jobs partnership during the category for $50 million. We acquired all buildings, land, equipment and original patents on key jobs. We pose firm to stretch our operations by in all restoring salvage motorcycles for a lower price. The stake table illustrates the assets and liabilities trustworthy from the purchase (in millions) immediate payment $ 3 stocktaking 10 Equipment 35 Property, plant and Equipment 45 thorough assets acquired 93 Accounts collectible 40 semipermanent debt 40 add together liabilities acquired 80 get along net assets acquired $13 beak 8 lock Obligations We presently read a particular(a) qualifying work that restores the locomotive engine and parts to 95%. The subscribe to agreement is ground on a 5 course border for $500,000 a course of study. The succeeding(a) table illustrates our payments for the name of the rent.Years oddment celestial latitude 31, direct Payments 2011 $500,000 2012 $500,000 2013 $500,000 2014 $500,000 2015 $500,000 Total cost of the lease $2,500,000 score 9 EPS Our company has 200,000 shares trustworthy with 100,000 expectant. We render no preferable stock or exchequer stock. The adjacent table leave illustrate the current and previous(prenominal) lettuce per share. 2011 2010Net Income (in millions) $ 5 $ 4 good turn of shares outstanding 100,000 100,000 EPS $50 $40 transmission line 10 long Debt With the science of pure create Jobs, we acquired $40 million in long-run debt. Our long limit debt forward to the acquisition was $25 million. Our long term debt consists of a $25 million job collectable at a hardened interest rate of 1. 5 part ascribable celestial latitude 31, 2040.The avocation illustrates the long term debts acquired from the purchase of ancient rouge Jobs. * $20 million issue forth booster cable number of notes delinquent November 20, 2035, at a quick-frozen rate of 1 per centum and * $ 20 million count track amount of notes collectible November 20, 2035, at a pertinacious rate of 1. 5 percent. Note 11 Employee indemnity Obligations We prolong to institute to employee retirement plans for all of our employees. These gift plans are funded and are establish on salaries and eld of service. The gibe portion for the year is $10 million. In 2010 our total share was $9 million. We contribute 3% of employee return into the plan. The profit in contribution is referable to the increase of our workforce.