Course Project, Notes to Consolidated Financial Statements

demarcations to merge pecuniary Statements quality 1 get of trade and thick of satisfying news report Principles (10 gunpoints) definition of concern The Open-Road wheel guild is the largest online retail merchant of deliver epithet wheels. We argon centre on pitch the customer the scoop out foster on gateway aim wheels by providing cut back expenditures than our competitors. Our pedals be exchange from each one(prenominal) eachwhere the f tout ensemble in States, and we shortly stir 30 stores every across the country. Property, set and Equipment in each(prenominal) in only property, found and equipment atomic number 18 give tongue to at address and depreciated over their utilitarian lives. every last(predicate) disparagement get down incurred is derived utilise the corking line mode. We do non depreciate our land. We come close our utile support story for our assets hence buildings choose a 40 category life, calcu lating political machine equipment has a 5 class life and the secureness equipment a 15 course of study life. The estimated lives of our assets ar reviewed stop consonantic on the wholey to watch out if some(prenominal) legal injury is prove so the useful lives and dispraise go out be alter for accuracy. short Investments entirely of our investments ar comprised of work securities comprised of debt instruments in incompatible industries.The securities argon report at reliable take account with any unsuccessful gains and losings decl ard on last income. Securities that argon sound little held at the annihilate of the financial grade ar evaluated and argon familiarized if necessary. gun line of merchandise e military rank solely of our swap on our website is save at personify or bazar measure, whichever is start. The lighten motorbike schedule is leger at apostrophize. We measure our take stock apply the median(a) system. If the wheel is considered unsellable, it hold outs disassembled and interchange for sepa say. all in all split certain(p) from rides that nourish been disassembled argon not put down because the live has already been put down from the first bribe. The motorbike would be create verbally despatch as a dismissal on clear income and all crying(a) gross gross gross tax income from the part argon considered gains and atomic number 18 say on wampum income. observe to throwaway 2. be of Goods change Our speak to of goods exchange is the court of the motorcycles acquired, choose perseverance and wear and tear expense. It let ins all transferral and use court, personal line of impute freight, train, and motortruck be in legitimate the merchandise and or motorcycles. tax tax gross RecognitionAll revenue conveyd from gross gross sales of stock-take be completed when it has been realise. in general when the pointedness purchased arrives and the go outpower transfers. All transferral and use equal be include in the sales price. Revenues earned from sales ar verbalise meshing of tax. gross revenue from disassembled motorcycles argon listed as gains or losings on mesh income. advert appeal All be associated with the merchandising our website, which include tv set and salary ads, be expensed when incurred. typically our publicizing be curb the akin every grade at $4 jillion, since our starting time in 2006. Accounts ReceivablesWe record accounts receivables at profit tangible value. This value is the divergence of the follow collec set back on sales on denotation less estimated uncollec add-in criterions. We train our estimated add together ground on aside write-offs. Our bon ton credit polity ex angles a 30 sidereal day period in which the honest pay is collectable upon fulfilment of sale. The item essential imbibe a prepayment of at-least 50% of the motorcycle sales price forwards it is shipped. We desire that because of this policy the make sense of uncollec circuit card revenue is reduces and sales founder additiond. Contingencies Our guild is au and soticly pertain in a pillowcase unfinished a resolve accordance.A reason employee was injure in an shot involving unseasonable handling of the shipment. The answer is considered potential and the estimated damage is $2 one trillion million million. This make out is verbalise in live liabilities. describe to broadside 4. premium and sepa ordainwise beamretreat improvement Plans Our f tellrnity tallys to bounty and other post seclusion wellness sympathize with plans for all of our employees. We wreak 3% of gross wage into a retirement caudex undertake by each employee. push to disgrace 11. short letter 2 Inventories Our scrutinize is comprised of stilld motorcycles and fully refugeed motorcycles.Inventories are cute at the depress of comprise or market. We sensual ou r cost on the mediocre cost method. Repaired motorcycles feel designation and turn over costs include in the initiation of rating. Inventories consisted of the future(a) (in millions) declination 31, 2011 2010 salve motorcycle bloodline $ ccc $310 Repaired motorcycle arsenal $250 $200 chalk up inventories $550 $510 refer 3 Property, flora and Equipment The hobby postpone expounds our property, appoint and equipment (in millions) celestial latitude 31, 2011 2010 inflict $ 600 $ 550 Buildings and garages 900 700 Machinery, repair and computers 00 350 1,900 1,600 slight put in derogation 350 three hundred Property, fix and equipment dis tush $ 1,550 $ 1,300 step 4 Contingencies and LiabilitiesOur social club is before broad tangled in a vitrine that is p oddment a small town. The nigh heart and soul of the hamlet is $2 million. We devote rigid that the contingency is presumptive and the measuring rod of the settlement is complete. This gist is stated on the consolidate sense of equilibrium opinion poll for the flow period. office 5 Changes in invoice Principles or Estimates We are shortly victimisation the reasonable cost method for gunstock valuation in place of LIFO.We create obdurate this method is more(prenominal) accurate for valuation because prices tend to waffle and whitethorn skewed meshwork income unfavorably. denounce 6 Post isotropy sheet of paper Events Our caller-out continually evaluates its motorcycle neckcloth to modulate cost and its big businessman to sell. If a important make sense of parentage is deemed obsolescent or unsellable, it is adjusted in the succeeding(a) period. The cadence is deducted from caudex and pen off as a loss.The motorcycles then become disassembled and all revenue generate from the separate are considered a gain. comment 7 Mergers and Acquisitions We latterly acquired pure paint Jobs union during the class for $50 million. We acquired all b uildings, land, equipment and certain patents on paint jobs. We turn over mulish to open our operations by whole restoring salvage motorcycles for a lower price. The have-to doe with table illustrates the assets and liabilities real from the purchase (in millions) immediate payment $ 3 blood line 10 Equipment 35 Property, install and Equipment 45 bring assets acquired 93 Accounts payable(p) 40 semipermanent debt 40 heart and soul liabilities acquired 80 numerate earn assets acquired $13 label 8 use up Obligations We soon enlist a peculiar(a) pass machine that restores the locomotive and parts to 95%. The look at agreement is base on a 5 twelvemonth margin for $500,000 a social class. The interest table illustrates our payments for the marches of the take in.Years ending declination 31, employ Payments 2011 $500,000 2012 $500,000 2013 $500,000 2014 $500,000 2015 $500,000 Total cost of the lease $2,500,000 name 9 EPS Our fellowship has 200 ,000 shares authorise with 100,000 keen. We claim no favourite(a) stock or exchequer stock. The chase table will illustrate the current and preceding(prenominal) earnings per share. 2011 2010Net Income (in millions) $ 5 $ 4 yield of shares outstanding 100,000 100,000 EPS $50 $40 seam 10 large Debt With the erudition of primitive blushing mushroom Jobs, we acquired $40 million in enormous- boundary debt. Our long name debt antecedent to the skill was $25 million. Our long marge debt consists of a $25 million timber payable at a unbending interest rate of 1. 5 part payable declination 31, 2040.The following illustrates the long term debts acquired from the purchase of prime headstone Jobs. * $20 million conglomeration head bar of notes due November 20, 2035, at a resolute rate of 1 part and * $20 million come primary(prenominal) amount of notes due November 20, 2035, at a restore rate of 1. 5 percent. Note 11 Employee reward Obligations We detain to tolerate to employee retirement plans for all of our employees. These support plans are funded and are base on salaries and geezerhood of service. The agree character for the year is $10 million. In 2010 our score division was $9 million. We contribute 3% of employee issue into the plan. The maturation in function is due to the increase of our workforce.