Supreme Beans, Inc.
By
Group Two
Nancy Kirk
Jacqueline Moffitt
Tamela Struggs
Ruth Swindell
Mark Tedder
International Business
BUSI 4703
Dr. Juan Castro
October 29,2002
Executive Summary
The Search for a Great Cup of Coffee Must Consider the Type of Bean, The
Country of Origin, and the Roast. We will introduce you to the most interesting coffee
plantation in the world and expand your appreciate for the cup of coffee you drink each
morning for only pennies a cup.
Coffee beans, as they are commonly referred to, are actually seeds from the fruit
of the coffee plant. Coffee is only grown in the regions between the Tropic of Cancer
and the Tropic of Capricorn due to climate conditions. Most of this area is in Central and
South America. Costa Rica is a major producer of coffee beans and is world renowned
for its quality coffee.
The coffee growing and processing steps are numerous and labor intensive. We
will show how cost prohibitive this option is and why we decided to open a coffee
roasting business in the United States and export coffee beans instead of purchasing a
coffee plantation and mill.
We will begin with the background on Costa Rica and continue through the
process of purchasing and shipping beans, import laws and duties, distribution and
market analysis, and financial pro forma statements.
Supreme Beans, Inc.
We are a group of local business people with the same ideas and goals in creating
new businesses. We have successfully launched a new company, of which some of you
may be familiar with, called “Edge Software Company, Inc.”
We are now interested in beginning another new company called Supreme Beans,
Inc. to be located in the Tyler area. The purpose of the company is to provide premier
specialty blends of coffee to up-scale restaurants, coffee-houses and eateries, located
across the United States.
Our first inclination was to locate and purchase a coffee plantation in Costa Rica.
Our reason being that Costa Rica remains one of the safest and most attractive countries
for foreign investment in Latin America. The Costa Rican government maintains a
decidedly pro-U.S. stance in regard to financial security and tax laws. All individuals
and private companies, local or foreign can own land and property in Costa Rica. Few
restrictions apply, the most important being physical occupancy. Based on this reason,
and the fact that we did not wish to reside there on a permanent basis, we decided to start
a new roaster in the United States and secure a working relationship with a well-known
coffee plantation in Costa Rica.
We did considerable research on Costa Rica in regard to the culture, economic
condition, political standing, etc. We were very pleased to learn that Costa Rica is a
Central American success story. Costa Rica is a leader among Developing Countries in
provision of health care and education facilities. They spend 1% of GNP on defense and
more than 10% on health and education. Although they are still largely an agricultural
country, they have been expanding their economy to include strong technology and
tourism. The standard of living is relatively high and land ownership is widespread.
The following is additional information about Costa Rica: (www.cia-the world fact
book-Costa Rica)
TYPE OF CONSTITIUTION:
Democratic Republic
HEAD OF STATE:
President Jose Maria Figures
EDUCATION:
Compulsory at elementary level between
ages of 6 and 13 and is free at both
elementary and secondary levels.
MEMBERSHIP:
Central American Bank of Economic
Integration (BCIE)
Food & Agriculture Organization (FAO)
General Agreement of Tariffs and Trade
(Gatt)
International Bank for Reconstruction &
Development (World Bank)
International Coffee Organization(ICO)
International Finance Corporation (IFC)
International Fund for Agriculture
Development (IFAD)
International Labor Office (ILO)
International Monetary Fund (IMF)
Just to name a few of the 25 memberships
held by Costa Rica
SIZE:
51,100 sq. km including the Ilse del Coco
(slightly smaller that West Virginia)
CLIMATE:
Tropical and subtropical; dry season (Dec.
to April); rainy season (May to Nov.);
hottest season (March and April).
POPULATION:
3.13 Million (07/02)
NATIONALITY:
Costa Ricans
White
Black
Amerindian
Chinese
Other
94% (includes Mestizo)
3%
1%
1%
1%
RELGION:
Roman Catholic
Evangelical
Jehovah’s Witness
Other Protestant
Other
None
76.3%
13.7%
1.3%
0.7%
4.8%
3.2%
LANGUAGE:
Spanish
English spoken in business community and
tourist destinations, French and German
increasing.
EXPORTS:
Include coffee, bananas, sugar, pineapples,
textiles, electronic components and medical
equipment.
EXPORT PARTNERS:
U.S.
EU
Central America
Puerto Rica
Mexico
IMPORTS:
Raw Materials
Consumer Goods
Capital Equipment
Petroleum
IMPORT PARTNERS:
(2000 est.)
U.S.
EU
Mexico
Venezuela
Central America
51.8%
20.0%
10.6%
2.8%
1.7%
53.2%
10.3%
6.2%
5.3%
4.9%
Now I would like to tell you something about the coffee company/plantation we
have chosen to do business with. The name is La Minita and the plantation consists of
about 700 acres in production and some 1,750 million trees planted. La Minita produces
about 1.4 million prized and sought after coffee in the world (La Minita Coffee
Brochure).
THE LAND:
Geography and climate are the factors which dictate
potential ability to produce an exceptional coffee.
The small high mountainous region called Tarrazu
in Central Costa Rica has ideal conditions for
growing and this is where La Minita plantation is
located and the area is named after the river
Tarrazu.
THE PLANTINGS:
A coffee tree takes 5 years from the time it is
planted until it reaches production. Therefore, any
decision to use a specific coffee variety must be
carefully considered. La Minita produces the
traditional Café Tipica and the modern Arabica
variety called Caturra.
THE FARM
The farm is divided into five smaller units with
each unit named after a different flower. Each of
these units has a foreman or “Encargado” that is in
charge of a permanent crew. Collectively, the farms
are administered by a “Manadador” that the
foreman report to directly. There are also drivers,
carpenters, mechanics, warehousemen, and office
personnel.
THE FARMERS:
The men who make up each unit’s crew are the
backbone of the plantation and are skilled
horticulturalists that have spent their lives learning
their trade. In most every instance they come from
families that have generations of coffee experience.
Growing coffee is a delicate business with plenty of
hard physical labor and because of the steep terrain
is often dangerous work. La Minita has more than
100 of these men employed on a full-time basis.
THE CROP:
Growing coffee is like back yard gardening on a
massive scale because it is all done by hand at La
Minita. Each tree must be individually attended to
several times each year. The crop begins in April
with the flowering of the trees after the first rains.
Until the harvest starts in October pruning
takes place (20% of all trees each year), replanting
(5% every year), cleaning (removing weeds with
machete 3 times), fertilizing (a nitrogen formula at
the base of each tree 3 times), spraying (minor
elements 3 times), nurseries (seeding and
cultivating about 200,000 trees every year), pruning
all shade trees (about 4,000), these and a myriad of
other jobs keep everyone busy waiting for the
harvest to come.
THE HARVEST:
The coffee fruit begins to ripen in late September.
The berries gradually turn red and plump up with a
sweet sticky fruit covering the seed. That seed,
after complicated processing, eventually becomes
what we know as the coffee bean. It is cr5itical to
the taste of the cup that the fruit is picked as
uniformly ripened as possible. This does not
happen all at once, so each tree must be picked four
times. La Minita harvests over 5 million pounds of
fruit coffee, all of it by hand.
THE PICKERS:
In Costa Rica, the coffee harvest is called “La Fiesta
de Café” which means “The Coffee Festival”.
Whole families join in the picking of the coffee
crop. It is a time of good weather, hard work, and
good pay. At the height of the crop, La Minita has
upwards of 600 people picking coffee.
THE MILLING:
After the coffee is picked it is transported to the
“Beneficio” where it begins a series of
transformation that eventually turns it into the hard
green coffee beans that a specialty roaster
purchases. The coffee must be peeled, fermented,
washed, dried, peeled again, polished, mixed, and
finally bagged for shipment. At each step of the
way it is being consistently sorted for quality.
Every step is critical. A mistake could spoil a lot of
coffee.
THE PREPARATION:
Many things influence the taste that the coffee has
when brewed. Finally, a specific grade of coffee is
prepared according to the contract that has been
signed with an exporter.
When the Brazilian frost occurred in 1975, 40% of
the world’s coffee was destroyed for 2 years.
Therefore, exporters and importers were obligated
to take any coffee that was offered. When supplies
finally normalized, superior qualities never returned
to the market. Not so with La Minita Tarrazu.
They are recognized as one of the great coffees of
the world. The last step before bagging is a special
hand sorting to remove and defects. For every 100
lbs. of raw material that La Minita starts with only
23 lbs. of it ends up as La Minita Tarrazu.
Based on the elaborate process involved in the growing and processing of
coffee beans, we unanimously decided to restrict our venture into the coffee business as
roasters only. The remainder of our paper will be devoted to the various aspects involved
in purchasing/brokerage and shipping, importation laws, market analysis and distribution,
and financial pro forma.
PURCHASING AND SHIPPING
After much consideration, we decided to use the La Minita Coffee Brokerage firm
to purchase our beans from. The quality of their beans are world famous and since we
are directing our business to high-end eateries and restaurants we want the highest quality
of beans available. The company has been in business for over 40 years and has a
sterling reputation. Since we are at a disadvantage of doing business in a foreign country,
we felt it was crucial to enter into a business relationship with a company that has an
impeccable reputation and has experience that can be trusted. La Minita brokerage has
consistent quality with their beans and offer fair prices when brokering beans from Costa
Rica, Columbia, Guatemala, or Mexico. We have currently contracted to purchase 1000
bags of beans at 150 pounds each. This will be a total of 150,000 pounds of beans at an
average of $2.50 per pound. Based on the high quality standards we have set for
Supreme Beans, we realize we will pay top dollar for coffee beans we purchase. La
Minita Coffee Brokerage will be responsible for transportation to the loading docks at
Puerto Limon.
We also will use the customs brokerage firm Diversified Freight Logistics (DFL)
out of Dallas, Texas to handle the shipment of beans. They are a reputable company and
have experience in dealing with export laws and duties, transportation permits, terms of
sale, and import laws and duties. We have an agreed upon freight cost for our first
shipment of beans into the U.S. This will eliminate the need for us to be familiar with all
the laws and regulations pertaining to imports. DFL will handle the shipment from the
docks of Costa Rica leaving at Puerto Limon, arriving in Houston, then ground shipped
from Houston to Tyler (see attached shipping contract).
IMPORTATION LAWS AND REGULATIONS
There are four importation laws and regulations that must be adhered to when
importing products into the United States that apply to the importation of coffee beans.
The coffee importation business must adhere to each of the following:
Duties and Fees
Goods imported from other countries have a duty rate which the importer must
pay to Customs Service. The duty rate is based on the goods classification. Coffee not
roasted falls under 0711 of the Standard International Trade Classification Revision 3
(www.intracen.org). The rate can be influenced by the country of origin, can be
specifically based on the quantity of goods being imported, or ad valorem (based on the
value of the goods imported, or a combination of both quantity and value).
The two most important fees levied on imports are the Harbor Maintenance Fee
(HMF) and the Merchandise Processing Fee (MPF). The HMF is used to maintain U.S.
ports and the MPF applies to all imports except NAFTA. MPF is used by Customs for
administrative costs. HMF is 0.125% of the entered value of the goods imported. MPF is
0.21% of the entered value or a maximum of $485 per shipment of goods.
Country of Origin
The country of origin is the country where the goods are being imported from.
Marking is the process of labeling or writing the country of origin’s name on the
imported good or the container in which it is imported. Import markings must be clear,
concise, indelible, and permanently marked on the imported goods in English.
Some goods are exempt from markings. However their containers must be marked
and entry documents must reflect the country of origin. Coffee enters the United States
in container vessels and the containers are clearly marked and entry documents reflect the
country of origin. The following are some marking exemptions:
1) Goods incapable of being marked
2) Goods which cannot be marked prior to their shipment into the U.S. without
causing injury or which are cost prohibitive
2) Goods which have their containers marked to indicate the country of origin,
(e.g. bulk chemicals)
4) Crude substances (e.g. crude oil)
5) Goods for the importer’s use and not intended for sale in the imported form
6) Goods processed in the U.S. by the importer without intending to conceal
the origin of the good, but for which marking is unavoidably destroyed or
permanently concealed
7) Goods which ultimately are purchased for unknown circumstances such as
NAFTA goods, the origin is known without marking
8) Goods produced more than 20 years before being imported
9) Products of possession of the U.S.
10) U.S. products exported and returned
Valuation
Importers should use care when reporting a value to U.S. Customs on imported
goods. Report of value should be made even if there is not a sale (e.g.. repairs) or the duty
amount on the imported good is not affected. Complete records should be kept to support
the reported value and any deductions claimed on the goods being imported. Records
must be easily traceable to the entry documents.
After goods arrive in the U.S., the importer must file entry documents to have
Customs release the goods. Entry documents include Customs Form 3461, air waybill,
carrier’s certificate, commercial invoice, and packing lists along with other information
regarding the port of origin and destination of the goods. The importer will pay any
duties, taxes, and fees when the entry summary is filed. In the instance of Supreme
Beans, Inc, all imported goods will be processed through the broker Diversified Freight
Logistics, Inc. to ensure compliance with all of the above (www.exportimportlaw.com/legal
essentials of importing).
Violations of Customs
The Customs Service can fine violators in amounts as high as the goods’ entire
resale value, impose liquidated damages, seize and withhold goods, and restrict future
import shipments. The following are the most frequently imposed penalties Customs
enforces.
Criminal-Criminal fraud requires the government to prove beyond a reasonable
doubt that a person made a false statement or omission to the government, maximum
penalties include forfeiture of the goods, fines up to $500,000 and five years
imprisonment.
Civil- Requires that the government make its case by a preponderance of evidence
or the government merely needs to prove that it is “more likely than not” that the person
committed fraud. Civil enforcement includes seizure, forfeiture, and penalties, depending
on the reason for the violation.
Negligence- Gross negligence can result in penalties of up to four times the loss
of revenue to Customs or 40% of the dutiable value of the goods, if the violation did not
result in a loss of revenue. Simple negligence can result in penalties of up to 2 times the
loss of revenue to Customs or a maximum penalty of 20% of the dutiable value of the
goods if no loss of value occurred.
Record-keeping- Customs can assess penalties for failure to maintain records and
produce those records upon request. Penalties can be assessed up to $100,000 per
violation. For negligence, the maximum penalty is $10,000 per transaction. Customs can
penalizes companies and hold individual employees and officers personally liable. The
importer remains ultimately liable for compliance with the import laws. The importer can
be penalized even if a broker or other agent assisted with or directed the shipment of
goods (www.exportimportlaw.com/customs enforcement and penalties).
Because we have entered into an agreement with Diversified Freight Logistics,
Inc., to broker all imports for Supreme Beans, Inc., they will be responsible for
compliance with all U.S. Customs laws and regulations and any violations or penalties
assessed will be the responsibility of Diversified Freight Logistics, Inc.
U.S. /STATE PERMITS
In addition to the importation laws, there are U.S. rules and regulations that apply
to operating a business in the U.S. The following is a list of licenses required for a coffee
roasting business to maintain a good standing with regulators.
1) Weight and Measures- Comes under the supervision of the Texas Department
of Transportation and this agency issues licenses to businesses operating motor
vehicles on the highways across the state of Texas. A copy of the weights and
measures handbook must be kept on file for business use. All companies are
required to maintain scales and equipment for accuracy on items being sold by
weight.
2)Texas State Health Department/County Health Department-The County Health
Department regulates the health clientele within each county and the Texas State
Health Department on a statewide level regulates all wholesalers. Permits are
issued annually and a fee is assessed for the permit. Fruit stands or other types of
food distribution markets are common examples of what the county regulates.
Each county has regulations specific to the county where markets are operated.
Supreme Beans roasting business falls under the jurisdiction of Texas State
Department of Health because we are a wholesaler only. The following are some
common regulations and procedures: (Gibson).
a. Keep all foodstuffs off the ground.
b. Home canned materials are not allowed to be sold.
c. Raw honey should be labeled as such for the seller’s protection.
d. Necessary methods to ensure against contamination of food by
insects, rodents, and other animals must be taken.
e. Store empty crates in a clean and sanitary manner.
f. Ensure that garbage is properly disposed of.
g. Properly refrigerate all perishable foods such as milk, eggs, and
meat.
h. Do not cut fresh fruit to serve as samples to clientele.
i. Comply with all building codes and permits.
3) Sales and Use Permits-Issued by the office of the Texas State Comptroller of
Public Accounts and is required for every individual, partnership, corporation, or
organization who makes sales, leases, or rentals of taxable items in Texas. All
businesses are required to obtain a Sales and Use Permit prior to beginning of
operation. Businesses are required to submit monthly, quarterly, or annual sales
tax reports and submit all sales tax collected. A sales tax number is issued for
each business and is used to track for reporting according to state requirements.
There is not a fee for the permit and it is in effect as long as the company is in
business and collecting sales tax.
4) Food Establishment-The Texas Food and Establishment has numerous rules
and regulations that a business must adhere to in order to stay in operation. A
permit is issued through the Texas Department of Health, Bureau of Food and
Drug Safety, Retail Foods Division. Establishments that are not in compliance
can have operations suspended immediately and can remain closed for business
until they are within compliance.
ROASTING PROCESS
Coffee beans, as they are commonly referred to, are actually seeds from the fruit
of the coffee plant. The fruit, referred to in the business as a cherry, is bright red when
picked and turns a shade of pale green after cleaning and drying. Coffee plants require
steady temperatures and are grown near the equator, between the Tropic of Cancer and
the Tropic of Capricorn. Once harvested, the pulp of the berries is removed by one of
two methods, not because it produces better tasting beans than the natural dry method but
because it is more reliable.
The beans are shipped in 150-pound burlap bags after being cleaned of the fruit
pulp and dried. After the beans are packaged, the average time from the mill to the
roaster is approximately 2 to 3 months, although some beans are stored and shipped as
needed and can remain in storage up to 9 months. Once the beans arrive at Supreme
Beans, Inc., they are stocked, labeled, and prepared for roasting. Beans from different
countries and regions have distinct flavors, the beans from the Costa Rican estate of La
Minita are prized as one of the finest specialty beans. Specialty beans are so-called
because they can be roasted without blending with other beans, and are of a higher
quality.
Roasting is the process of making the dried seed of the coffee plant into a usable
product. Essentially, roasting releases moisture in the beans and brings oils to the
surface. The roasting process is quite simple, a roasting oven is used to cook the beans to
one of four different roasts and then the beans are cooled rapidly to prevent overcooking.
The four different roasts are light, medium, darker, and darkest. Most commercial blends
are light roasted. For Espresso, the beans are roasted the darkest, almost black, with a
heavy bittersweet charcoal flavor. The roaster is much like a clothes dryer with a large
tumbler inside an oven that reaches temperatures around 500 degrees Fahrenheit. The
roasting ovens are labor intensive and require constant supervision by specially trained
employees. One employee is needed for each roasting machine, and when not tending a
batch at the roaster, that employee can handle other duties within the plant.
Flavors are added to roasted beans in a separate process that must remain air draft
separated from the plant to prevent contamination with natural roasts. Many flavored
coffees are made with less expensive lower quality blends of beans. Although adding
flavors to specialty beans makes a delightful and unique coffee, we at Supreme Beans,
Inc. are reluctant to add flavoring to our roasted beans, which we already consider as
having the finest coffee flavor. Flavors can be added after roasting or just before
drinking, depending on the customers needs and preferences.
How the beans are packaged depends largely on whether the customer wants the
beans whole or ground. The majority of product will be shipped as whole beans to
maintain consistently fresh flavor and to allow for simplified processing and packaging.
Packages are sized from 1 oz. to 16 oz. bags.
PLANT SET-UP
The plant can be located anywhere that has an infrastructure that is capable of
supporting commercial trucking. The two main utilities needed are electricity and gas.
We have located a possible warehouse site that will easily accommodate our needs at this
time.
The plant will encompass the shipping and receiving areas as well as the roasting
and packaging operations. Initial set-up for the plant will require a minimum of 10,000
square feet, with room for future expansion up to an additional 10,000 square feet.
Approximately 3,000 square feet will be needed for production, with 5,000 square feet
for storage of raw materials and finished goods, and 2,000 square feet for offices. There
are no plans for retail operations at the plant, and the plant will not be open to the public.
DISTRIBUTION
Product distribution will be through general freight delivery. Different companies
can be used, depending on customer requirements for time of delivery. Once the product
is packaged at Supreme Beans, Inc. it will ship from the plant no later than 30 days after
packaging to maintain quality control and assure customers fresh coffee. Local
customers within a 50-mile radius of the plant will have deliveries made by a company
employee. Customers will be informed that whole beans are fresher and will have a
longer shelf-life than ground coffee, so length of time in transit will not be a major
concern with whole bean customers, and ground coffee will only be available to local
customers. With the longer shelf-life of whole beans, customers can be serviced
worldwide. Three employees running automated equipment can handle packaging,
shipping and local deliveries.
MARKET ANALYSIS
The market for specialty coffees has grown an average of 34 percent over the past
10 years, and is growing at a steady 4 percent annually. Americans are drinking less
commercial and instant coffee, and more are choosing specialty coffees and blends.
Restaurants are taking coffee more seriously, as well with some up-scale restaurants
hiring consultants to match the flavor of their own house blends to their cuisine. The
market is wide open for specialty roasters, as there are only 6 specialty roasters in the
United States. Consumers are also convinced that freshly roasted, whole-bean coffees
taste better than canned, and are searching for outlets that cater to their needs.
Supreme Beans, Inc. has acquired 8 tentative contracts for supplying fresh roasted
whole-bean coffees. Customers will range from coast to coast in the U.S. with one
customer located in Alberta, Canada. Supreme Beans, Inc. will roast, package, and ship
approximately 1,500 pounds of coffee per month during the first year of business.
Demand for Supreme Beans specialty roasts is expected to increase at least 10 percent
after the first year of business, and may jump as much as 20 percent if the trend analysis
represents actual growth. With the stability of the Costa Rican economy and
government, and the high quality of their specialty beans, Supreme Beans can virtually
guarantee a steadily increasing return on investment.
Competition is not a major factor in the specialty coffee market. Each roaster
produces a unique flavor coffee that depends on the skill of the roaster and what type of
bean is used in the roast. The expansion of the market depends of how each coffee or
blend is marketed to the customer. Since tastes vary from person to person, it is up to the
customer to determine which specialty coffee they will serve. Most retail customers
serve several different coffees and blends, and will blend beans from different roasts inhouse to produce an even wider variety of products for the customer. Major competitors
include: Hard Beans, Blue Mountain, Bourbon Santos, Monsooned Malabar, and Country
Coffee. These roasters all purchase beans from different regions ranging from Hawaii to
India, and have loyal customers who are impressed with the consistency of their roasts.
Each competitor specializes in a particular roast that is difficult if not impossible to
reproduce. Supreme Beans, Inc. has engineered a unique flavor roast that retail
customers will be lining up to add to their product line.
FINANCIAL ANALYSIS
We have provided you all of the facts pertaining to the coffee business in general
and the roasting business in detail. Based on all of the market research, demand for high
quality coffee, and the limited competition in this region, we feel confident that we have
a solid business proposition with gross sales growth at a minimum of 10% within the first
year. The pro forma balance sheet outlines the current start-up business costs and capital
injection of $250,000 from each of the five owners and an estimated balance sheet for the
first year of operations for Supreme Beans, Inc.(see attached financial statement). In
addition, the business will be a corporation and all owners will provide assistance in the
day-to-day operations of the business until it is well established and no longer needs dayto-day assistance.
To sum it all up, the increase in specialty coffees has single handedly reversed the
overall decline of coffee consumption in the United States. Restaurants are taking coffee
seriously and millions of Americans have gotten accustomed to specialty roasts and are
enjoying a higher quality of coffee. This is an ideal time to enter a market with very few
roasters in the United States and to establish Supreme Beans, Inc. as a stellar roaster
across the United States. Based on capital, market analysis, start-up funding, and
deliverable contracts, the first year of operations will be profitable and with anticipated
growth will be a venture that will provide an excellent return on investment for
shareholders.
Works Cited
Gibson, Richard D. Legal Structure Rules and Regulations for Direct Marketing
Enterprises.
La Minita Coffee Brochure
www.CIA-The World Fact Book-Costa Rica
www.exportimportlaw.com/customs enforcement and penalties
www.exportimportlaw.com/legal essentials of importing
ww.intracen.org
Shipping Contract
To: Supreme Beans, Inc.
Tyler, Texas
October 28, 2002
In accordance with the rates DFL contracted for the shipment of raw beans from
Puerto Limon, Costa Rica to Houston, Texas via cargo ship then to Tyler, Texas via
ground transport these are the agreed upon rates.
Total purchase order:
1000 bags @ 150 lbs. per bag
Terms of sale:
FOB Puerto Limon Costa Rica @
2.50/lb.; total price $375,000
Shipment requires:
4 of 20’ ocean containers
The costing would be as follows:
1000 bags coffee FOB Port
Ocean freight (4 contrs x $1500 ea.)
Customs clearance:
Merchandise Processing Fee
(.21% of value)
Harbor Maintenance Fee
(.125% of value)
Customs Entry Fee
Marine Insurance
Inland freight from Houston to Tyler
($550 per container)
Total “Landed Cost” Tyler, Texas
$375,000.00
6,000.00
787.50
468.75
250.00
1,300.00
2,200.00
$386,006.25
Supreme Beans, Inc
Pro Forma Balance
Sheet
10/29/2002
########
Assets
Current Assets
Cash
Accts Rec
Inventories
Total Current
Assets
1,238,000
0
0
275,000
550,000
450,000
1,238,000
1,275,000
Gross Fixed
Assets
Machinery and Equipment
Furniture and Equipment
Vehicles
Other Misc. Equipment
Tota Gross Fixed Assets
333,000
25,000
25,000
15,000
Total Assets
333,000
40,000
50,000
40,000
398,000
488,000
$1,636,000
1,763,000
Liabilities and Stockholders Equity
Current Liability
Bean Contracts
Accounts Payable
Total Current Liabilities
Long-term Debt
386,000
0
386,000
0
Total Liabilities
Stockholders
Equity
Preferred Stock
Total Stockholders Equity
Total Liabilities and Stockholders Equity
.
100,000
3,000
103,000
410,000
$386,000
513,000
1,250,000
$1,250,000
$1,636,000
1,250,000
1,763,000