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6 <br /> • <br /> NUNEZ CONSTRUCTION,INC. <br /> NOTES TO THE FINANCIAL STATEMENTS <br /> s.•. <br /> FOR THE YEAR ENDED DECEMBER 31,2017 <br /> caw <br /> (READ THE INDEPENDENT ACCOUNTANTS'REVIEW REPORT) <br /> NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br /> Property and Equipment <br /> Property and Equipment are recorded at historical cost and are being depreciated on the straight <br /> yr line method over useful lives of five to seven years. Repairs and maintenance costs which do <br /> 41.0 not increase the useful lives of the assets are charged to operations as incurred. <br /> Income Taxes / <br /> d ► The Company has elected to be taxed as an"S" Corporate oNAccordingly,income or losses are <br /> reported by the stockholder for federal taxation poses. Thefore, no provision for income <br /> taxes has been made in the financial statements. - " <br /> Use of Estimates <br /> O The preparation of financial statements m co?tfornuty with generally accepted accounting <br /> principles requires management to make estiT,ates arta assumptions that affect certain reported <br /> amounts and disclosures. Acco;, nglh, actual results could differ from those estimates. <br /> vi. <br /> NOTE 2-CONTRACTS REFI B1 E ; <br /> i`► Consistent with industry pra,bees,: error billings include retainage that will be collected at the <br /> , Wiz;:- <br /> completion of th ob. Reta' ' ge in the amount of $22,894 has been included in contracts <br /> receivable as the cokacts are ort in duration. The Company follows the practice of filing <br /> statutory liens on all corLstru�ci�-`pn projects. Contracts receivable at December 31,2017 consisted <br /> �Y1r <br /> of amounts due on both o; pleted and uncompleted projects. Contracts receivable from one <br /> VW contract represented approximately 80% of total contracts receivable. There was no provision <br /> for bad debt expense for the year ended December 31, 2017. <br /> NOTE 3-BANK LINE OF CREDIT <br /> The Company has a line of credit from Total Bank in the amount of$100,000. The line of credit <br /> expires on September 30,2018 and has a variable interest rate based upon the prime interest rate <br /> 411/ <br /> plus 2% which was 6.5% at December 31, 2017. The line of credit is guaranteed by the sole <br /> tar stockholder of the company. There was no outstanding balance at December 31, 2017. <br /> 4r <br /> I <br />