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FIXED ASSETS
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3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2013
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| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FIXED ASSETS |
On August 11, 2011, the Company entered into an Aircraft Purchase/Sales Agreement with an unrelated and unaffiliated third party for the acquisition of a 2002 Robinson R44 Raven II helicopter for the purchase price of $212,500. Pursuant to paragraph 7 of the agreement, the Seller warrants that the Aircraft is in airworthy condition and has a currently effective Standard Category airworthiness certificate issued by the Federal Aviation Administration (“FAA”) and that all Airworthiness Directives have been complied with. In September 2011, the Company engaged the services of an independent third party to perform the FAA required annual inspection without incident. The first mandatory FAA overhaul is required at 2,000 hobbs hours of operation, which has occurred in April 2013. The required overhaul is anticipated to take at least five months and keep the helicopter inoperable until December 2013. The overhaul is anticipated to cost between $200,000 and $220,000, which will increase the depreciable value of the asset and its hourly rental rate as well. The aircraft was placed in service on October 1, 2011 and is estimated to have a useful life of approximately 10 years.
Fixed assets consist of the following:
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