Note 1 - Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Feb. 28, 2017

Note 1 - Basis of Presentation and Summary of Significant Accounting Policies

1.	BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Activity: Koo’Toor Design, Inc. (the “Company”) was incorporated in the State of Nevada on May 4, 2016. We are a recently organized company that engages in the sale of furniture and home accessories. With funding we intend to sell furniture and accessories from storefront locations, but to begin, we plan to make house calls, and sell online. Our website is www.kootoordesign.com. Our plan is to have our first store location in Roseville, California with plans to open up to 10 stores in California over time. On May 4, 2016, Mr. Ruben Gonzales, our Company’s founder, was appointed President and Director of the Company. Mr. Gonzales is currently our sole officer and director of the Company. Our headquarters are located at 116 Grove Street Roseville, CA 95678.

To date, our activities have been limited to formation, completion of a Form S-1 Registration Statement to assist in the raising of equity capital, the commencement of fundraising under our Form S-1, and the development of a business plan. We have only recently commenced our first sales. We have not yet raised sufficient funds to open our first retail location.

Financial Statement Presentation: The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the nine-month period ended February 28, 2017, are not necessarily indicative of the results that may be expected for the year ending May 31, 2017. For further information, refer to the financial statements and footnotes thereto for the fiscal year ended May 31, 2016, included in the Company’s Registration Statement on Form S-1/A as filed with the Securities and Exchange Commission on August 18, 2016

Fiscal year end: The Company has selected May 31 as its fiscal year end.

Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.

Cash Equivalents: The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.

Revenue recognition and related allowances: Revenue from the sale of goods is recognized when the risks and rewards of ownership have been transferred to the customer, which is usually when title passes. Revenue is measured at the fair value of the consideration received, net of trade discounts and sales taxes.

Accounts Receivable and Allowance for Doubtful Accounts: Accounts receivable are stated at the amount that management expects to collect from outstanding balances. Bad debts and allowances are provided based on historical experience and management’s evaluation of outstanding accounts receivable. Management evaluates past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts at February 28, 2017 and May 31, 2016 is $Nil.

Inventories: Presently the Company is a reseller of furniture and home accessories and as such will not maintain inventory as all items are direct drop shipped to customers when ordered and no inventory is held on hand as a result.

Warranty: The Company is a reseller of products which are shipped to our customers directly from the manufacturer and as a result, there are no costs that may be incurred by the Company under the terms of the limited warranty provided by the manufacturers directly to the purchasers. We do not provide any provisions for obligations which may arise under manufacturer’s warranties and therefore at no time incur any warranty liabilities.

Advertising and Marketing Costs: Advertising and marketing costs are expensed as incurred and were $nil during the nine months ended February 28, 2017.

Income taxes: The Company has adopted ASC Topic 740, “Income Taxes”. ASC Topic 740 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Basic and Diluted Loss Per Share: In accordance with ASC Topic 280 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

New Accounting Pronouncements:

There were various accounting standards and interpretations issued recently, none of which are expected to have a material effect on the Company’s operations, financial position or cash flows.

Koo'Toor Design Inc. 10-Q