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r <br /> 41110 <br /> NUNEZ CONSTRUCTION, INC. <br /> NOTES TO THE FINANCIAL STATEMENTS <br /> +1r FOR THE YEAR ENDED DECEMBER 31,2017 <br /> 1110 <br /> (READ THE INDEPENDENT ACCOUNTANTS'REVIEW REPORT) <br /> iiir <br /> tar 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 /> line method over useful lives of five to seven years. Repairs and maintenance costs which do <br /> not increase the useful lives of the assets are charged to operations as incurred. <br /> Income Taxes <br /> The Company has elected to be taxed as an"S" Corporation Accordingly, income or losses are <br /> 4Ir reported by the stockholder for federal taxation poses. Theefore, no provision for income <br /> taxes has been made in the financial statements.. <br /> Use of Estimates <br /> The preparation of financial statements in conformity with generally accepted accounting <br /> principles requires management to make estimates and assumptions that affect certain reported <br /> +fir amounts and disclosures. Accordingly, actual results could differ from those estimates. <br /> NOTE 2 - CONTRACTS RECEIVABLE <br /> Consistent with industry pra t ces,4erim billings include retainage that will be collected at the <br /> completion of the job. RetainAge i t'the amount of $22,894 has been included in contracts <br /> receivable as the contracts are short in duration. The Company follows the practice of filing <br /> statutory liens on all construction projects. Contracts receivable at December 31,2017 consisted <br /> of amounts due on both completed and uncompleted projects. Contracts receivable from one <br /> 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 /> plus 2% which was 6.5% at December 31, 2017. The line of credit is guaranteed by the sole <br /> 'o' stockholder of the company. There was no outstanding balance at December 31,2017. <br /> Ar <br /> 'err <br /> err. -8- <br /> tor <br />