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NUNEZ CONSTRUCTION,INC. <br /> ' NOTES TO THE FINANCIAL STATEMENTS <br /> FOR THE YEAR ENDED DECEMBER 31,2017 <br /> (READ THE INDEPENDENT ACCOUNTANTS' REVIEW REPORT) <br /> NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <br /> + r <br /> Business Activity <br /> The Company is a Florida state-licensed General Contractor and provides construction for <br /> residential and commercial projects, generally located in South Florida. <br /> Revenue and Cost Recognition <br /> + The Company recognizes revenues on the percentage-of-completion method, measured by the <br /> percentage of costs incurred to date to estimated total costa for each contract. Management <br /> considers total cost to be the best available measure t f progress a the contracts. Because of the <br /> INF <br /> inherent uncertainties in estimating costs, it is,At least reasonably possible that the estimates <br /> Oir used will change. <br /> ter <br /> Contract costs include all direct material and labor costs and those indirect costs related thereto. <br /> on <br /> Provisions for estimated losses on uncompletedtracts are made in the period in which such <br /> losses are determined. Changes in estimated lob profitability resulting from job performance, <br /> job conditions, and change orders"are accounted for as changes in estimates in the current <br /> rr period. <br /> Costs and estimated earnings m excess of billings on uncompleted contracts represent revenues <br /> recognized in excess of amounts billed. Billings in excess of costs and estimated earnings on <br /> uncompleted contracts represents billings in excess of revenues recognized. <br /> Cash <br /> 410, <br /> The Company maintains cash accounts in two institutions which are insured by the Federal <br /> lirâ–º Deposit Insurance Corporation up to$250,000 each. Management believes no significant risk of <br /> loss exists. <br /> Contracts Receivable <br /> +1r The Company records a receivable when interim billings are made on a contract in progress net <br /> of the allowance for doubtful accounts. Contracts receivable are written off when they are <br /> tar <br /> determined to be uncollectible. The allowance for doubtful accounts is estimated based on the <br /> lair Company's historical losses, the existing economic conditions in the construction industry, and <br /> lilt the financial stability of its customers. <br /> 111, <br /> -7- <br /> +ir <br /> irr <br />