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<br />BUDGET CONSTRUCTION CO., INC. AND BUDGET HOLDINGS, LLC <br />NOTES TO THE COMBINED FINANCIAL STATEMENTS <br />Years Ended December 31, 2008 and 2007 <br /> <br />NOTE 3 - Costs and estimated earnings on uncompleted contracts (Continued): <br /> <br />Included in the accompanying combined balance sheets <br />under the following captions: <br /> <br />December 31, <br />2008 2007 <br /> <br />Costs and estimated earnings in excess of <br />billings on uncompleted contracts <br /> <br />$ <br /> <br />585,345 <br /> <br />$ 701,295 <br /> <br />Billings in excess of costs and estimated <br /> <br />earnings on uncompleted contracts <br /> <br />(792,209) <br />$ (206,864) <br /> <br />(1,080,895) <br />$ (379,600) <br /> <br />NOTE 4 - Property, equipment and capital leases, net: <br /> <br />Property, equipment and capital leases of The Company and The Affiliate consist of the following: <br /> <br />Heavy construction equipment <br />Land <br /> <br />Transportation equipment <br />Capital leases <br />Property <br />Building improvements <br />Computer and office equipment <br /> <br />December 31, <br />2008 2007 <br />$ 3,080,483 $ 2,658,832 <br />1,180,204 1,180,204 <br />1,155,338 1,079,046 <br />512,851 742,493 <br />250,551 250,551 <br />168,498 168,498 <br />98,458 84,757 <br />6,446,383 6,164,381 <br />(2,116,554)(1,885,721) <br /> <br />Less: accumulated depreciation and amortization <br /> <br />Total property, equipment and capital leases, net <br /> <br />$ 4,329,829 <br /> <br />$ 4,278,660 <br /> <br />Depreciation of property and equipment is provided utilizing the straight-line method over the <br />estimated useful lives of the respective assets as follows: <br /> <br />Computer and office equipment <br />Capital leases and Transportation equipment <br />Heavy construction equipment <br />Property and Building improvements <br /> <br />Years <br />3 - 5 <br />5 <br />10 <br />40 <br /> <br />NOTE 5 - Prepaid expenses: <br /> <br />At December 31,2008, prepaid expenses consist of $49,911 of prepaid insurance paid in advance of <br />its due date in accordance with the payment schedule established by the insurance company, and $4,000 <br />of refundable restoration bonds issued to the City of Miami. <br /> <br />10 <br /> <br />Benitez & Company, CPA's <br />