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TGSV ENTERPRISES, INC. <br /> <br />NOTES TO FINANCIAL STATEMENTS <br /> <br />DECEMBER 31, 2017 <br /> <br /> <br />7 PROPERTY AND EQUIPMENT, NET <br /> <br />Property and equipment consists of the following at December 31, 2017: <br /> <br /> Office furniture and equipment $ 110,991 <br /> Transportation equipment 125,645 <br /> Leasehold improvements 16,787 <br /> 253,423 <br /> Less: Accumulated depreciation 221,825 <br /> $ 31,598 <br /> <br /> Depreciation charged to income amounted to $12,202 for the year ended December 31, 2017. <br /> <br />8 ACCOUNTS PAYABLE <br /> <br /> Accounts payable include amounts due to subcontractors, totaling $475,126 at December 31, <br />2017, which have been retained pending completion and customer acceptance of jobs. <br /> <br />9 RELATED PARTY TRANSACTIONS <br /> <br />The Company leases its corporate office and a storage warehouse from an affiliate, under two <br />separate leases, (see Note 10). The office lease expired on December 31, 2017 and was <br />renewed for an additional three years ending December 31, 2020. The office lease has an <br />option to renew at a rate increase not exceeding 7% per annum. The minimum annual rental <br />for the lease is $81,240 and is payable in monthly installments of $6,770, including sales tax. <br />Rent paid to this affiliate for the year ended December 31, 2017 aggregated $81,240. <br /> <br />Future minimum lease payments under this operating lease are as follows: <br /> <br />Years ending December 31, 2018 $ 81,240 <br />2019 81,240 <br />2020 81,240 <br /> $ 243,720 <br /> <br />See independent accountants’ review report. <br />-13-