Jamba Juice 2007 Annual Report Download - page 124
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Table of Contents
NOTE 1. ORGANIZATION (CONTINUED)
Concentrations of Risk
The Company maintains food distribution contracts primarily with one supplier. This supplier provided during fiscal year 2005, 86% of product cost
included in cost of sales, which potentially subjects the Company to a concentration of business risk. If this supplier had operational problems or ceased
making product available to the Company, operations could be adversely affected.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
During the 2005 fiscal year, the Company changed its fiscal year end from the last Tuesday closest to December 24, to the second Tuesday in
December. The 2005 fiscal year ended December 13, 2005 includes 50 weeks.
Management Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
Cash
Cash primarily consists of demand deposits in interest and non-interest bearing accounts. The carrying amount of these deposits approximates their fair
value. The bank balances maintained may, at times, exceed available depository insurance limits. The Company believes no significant concentration of risk
exists with respect to these cash balances.
The Company held bank balances in excess of available depository limits of approximately $84,000 as of December 13, 2005.
Fair Value of Financial Instruments
The carrying value of cash and equivalents, receivables, and accounts payable and accrued expenses approximates fair value. The carrying value of
deferred rent and deferred tenant allowances approximate their estimated fair value due to the relatively short maturities.
Inventories
Inventories include only the purchase cost and are stated at lower of cost of market. Cost is determined using the first-in, first-out method (FIFO).
Inventories consist of food, beverages and available for sale promotional products.
Property and Equipment
Furniture, fixtures, and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of furniture, fixtures, and equipment
is calculated using the straight-line method over the estimated
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