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<br />I <br />I <br />.. <br />I <br /> <br />I <br />I <br />I <br />I <br />I <br />I. <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />.. <br />I <br /> <br />CUBELLlS BUSI~ESS TRUST <br /> <br />NOTES TO CONSOLIDATED FINANCIAl. STATE~)ENTS <br /> <br />Notc 2 - Summary of Significant Accounting Policics (Continued) <br /> <br />Incomc Taxes <br />The Company is a wholly owned subsidiary of the Trust. For income tax purposes, th~ Tnlst <br />dected to include the taxable income and deductions of the Company, incluJing its Cubellis <br />~Iarco Associates, Inc. and Cubellis/MGDF Associates, Inc. subsidiaries, as its own pursuant to <br />a quali tied S corporation subsidiary election. Furthenllorc, the Trust and its beneticiaries elected <br />S corporation status for federal income tax purposes and, accordingly, the taxable income and <br />losses of the Trust are included on the federal income tax retums of thc beneficiaries. It is <br />management's intention to fund required tax payments through distributions. For ~-lassachusetts <br />incomc tax purposes. the Trust. and not its beneficiarics, is subject to ylassachusctts income tax <br />The Trust is taxed on its Massachusetts taxable income and allocates to the Company its share of <br />the related tax provision. <br /> <br />Deferred income taxes renect the impact of temporary differences of reporting assets and <br />liabilities under the accrual method of accounting used in the preparation of the linancial <br />statements and the cash basis of accounting used to preparc the corporal\: income tax retums. <br /> <br />Reclassifications <br />Certain 2004 amounts have been reclassified to conform to the 2005 presentation. <br /> <br />:'Iiote J - Accounts Receivable <br /> <br />At December 31, accounts receivable, net consisted of the folio,^, ing: <br /> <br />Billed accounts receivable <br />Gnbillcd accounts receivable <br /> <br /> 2005 2004 <br />S 8.368.292 S 4,436,483 <br /> 428.572 <br /> 8,796,864 4.-+36.483 <br /> 50,785 64,917 <br />?~__8J.:l6~079 S 4.371.566 <br /> <br />Less allowance for doubtful accounts <br />:\ccounts receivable. net <br /> <br />!'iote 4 - Equipment and Improvements <br /> <br />Equipment and impro\'emcnts. net consists of the following at December 31: <br /> <br />2005 <br /> <br />2UU4 <br /> <br />Leasehold improvcments <br />Fumiturc ane! equipment <br />Motor vehicles <br /> <br />S 287,-+63 <br />2.85 I .539 <br />293,790 <br />3.432.792 <br />1.746.986 <br />Us.685.806 <br /> <br />S 278.030 <br />1.867.009 <br />318.763 <br />2.463.802 <br />1.319,334. <br />S t144~468 <br /> <br />Less accumulated e!epreciatton and amortiLation <br />Equipment and improvements. net <br /> <br />8 <br />