Notes and Assumptions

Notes and Assumptions - Notes and Assumptions Our company...

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Notes and Assumptions Our company will be incorporated as a Subchapter-S Corporation, freeing us from the costs of double taxation. Financial statements are reported using an accrual basis, and a depreciated historical cost basis. Revenues are recorded when earned and expenses are recorded at the time of the product's shipment. Revenues comprise cash sales, less any sales tax incurred. Outstanding receivables will only be in the form of credit card sales, thus no allowances for doubtful accounts are recognized. Deferred income taxes will be calculated using enacted statutory tax rates. Inventory valuation will be recorded as lower of cost or market, as determined by the first-in, first-out method. Capital assets will be recorded using the historical cost, less the cost of depreciation. Depreciation is recorded using the straight-line method over the useful life of the asset. Capitalized costs of software used by the Company will also be depreciated over the software's estimated useful life. The Company considers securities with a term of three months or less to be cash equivalents. Short term marketable securities are shown at cost, which approximates fair value.
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Notes and Assumptions - Notes and Assumptions Our company...

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