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6ir <br /> r <br /> . . <br /> .., . . . • . <br /> QNUNEZ CONSTRUCTION,INC. <br /> NOTES TO THE FINANCIAL STATEMENTS <br /> it" FOR THE YEAR ENDED DECEMBER 31,2017 <br /> (READ THE INDEPENDENT ACCOUNTANTS' REVIEW REPORT) <br /> tiiir <br /> r NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <br /> (fir <br /> fir Business Activity <br /> it The Company is a Florida state-licensed General Contractor and provides construction for <br /> it, residential and commercial projects, generally located in South Florida. <br /> itivi <br /> Revenue and Cost Recognition . <br /> ter, The Company recognizes revenues on the percentage-of;;,-ompletion method, measured by the <br /> iiiir percentage of costs incurred to date to estimated totaifcos for each contract. Management <br /> considers total cost to be the best available measure,of progress�:bn� the contracts. Because of the <br /> inherent uncertainties in estimating costs, it is E`least reasonably. possible that the estimates <br /> iiir used will change. 4'.,7" <br /> },. . ` <br /> +i 5ID <br /> • <br /> ittr Contract costs include all direct materialtdlabor costs and those indirect costs related thereto. <br /> 0 Provisions for estimated losses on uncompletee tracts are made in the period in which such <br /> ` oi <br /> losses are determined. Changes in estimated�jo pr� tability resulting from job performance, <br /> -ter�, �' - <br /> �' job conditions, and change ord W.: acro anted for as changes in estimates in the current <br /> iiir <br /> r,'r s3 <br /> period. 4 <br /> lir '� <br /> Costs and estimated earnings in cess of billings on uncompleted contracts represent revenues <br /> i► recognized in excess o as omits Mild. Billings in excess of costs and estimated earnings on <br /> uncompleted contracts represeZri nts billings in excess of revenues recognized. <br /> it <br /> Cash <br /> 'iter The Company maintains cash accounts in two institutions which are insured by the Federal <br /> V`r Deposit Insurance Corporation up to$250,000 each. Management believes no significant risk of <br /> v, loss exists. <br /> Contractss;o amoun.iii <br /> The Company records a receivable when interim billings are made on a contract in progress net <br /> ar of the allowance for doubtful accounts. Contracts receivable are written off when they'are. <br /> determined to be uncollectible. The allowance for doubtful accounts is estimated based on the <br /> r► • Company's historical losses, the existing economic conditions in the construction industry, and <br /> n1/ the financial stability of its customers. <br /> r <br /> 0, <br /> -7- <br /> r <br />