Villas of Stonehenge Condominium Association

Transcription

1 Balance Sheets December 31, Assets Current Assets: Cash and cash equivalents Accounts receivable, net of allowance for doubtful accounts (Note 1) Prepaid income taxes Total Current Assets Property and Equipment: Equipment Less: accumulated depreciation Net Property and Equipment (Note 1) Total Assets 211 S 97,178 2, ,956 1,889 (1,41) 488 $ 1, $ 11,875 2, ,299 1,889 (1,25) 684 $ 14,983 Liabilities and Fund Balance Liabilities: Accounts payable Monthly assessments paid in advance Federal withholding payable Total Liabilities Fund Balance: Operating Fund Major Repair and Replacement Fund Total Fund Balance Total Liabilities and Fund Balance S 7,933 9, ,85 (21,127) 13,721 82,594 $ 1,444 $ 1,486 7,81 9,296 15, 8,687 95,687 $ 14,983

2 Statements of Revenue, Expenses, and Fund Balance - Operating Fund Years ended December 31, Revenue: Maintenance fees (Note 2) Late fee income Clubhouse rental fees Total Revenue Operating Expenses: Grounds maintenance and snow removal Legal and professional Building maintenance Water and sewer Management fees Clubhouse expenses Disposal service Insurance Pool expenses Postage and supplies Electric Miscellaneous Depreciation Licenses and fees Total Expenses Excess (Deficiency) of Revenue Over Expenses Before Income Tax Federal Income Tax Excess (Deficiency) of Revenue Over Expenses Fund Balance, beginning of year Transfer to Major Repair and Replacement Fund Fund Balance (Deficit), end of year $ 175,724 1,7 176,731 59,793 47,958 25,916 18,582 16,2 11,984 11,776 11,378 5,773 1, ,61 (35,87) 257 (36,127) 15, $ (21,127) $ 167,981 1, ,556 53, ,524 15,944 16,2 12,529 1,93 12,962 7, , ,939 17, ,271 8,454 (1,725) $ 15,

3 Statements of Revenue, Expenses, and Fund Balance - Major Repair and Replacement Fund Years ended December 31, Revenue: Maintenance fees Late fee income Resale buy-in fees (Note 2) Interest income $ 27,82! 5 27,317 1,5 1, ,36 1,131 Total Revenue Deferred Maintenance and Replacement Expenses (Note 3): Irrigation Excess of Revenue Over Expenses Fund Balance, beginning of year Transfer from Operating Fund 31,34 8,36 23,34 8,687 31,88 31,88 38,154 1,725 Fund Balance, end of year $ 13, ,6.

4 Statements of Cash Flows Years ended December 31, Operating Activities: Excess (Deficiency) of revenue over expenses Depreciation Change in assets and liabilities: Accounts receivable Prepaid expenses Accounts payable Monthly assessments paid in advance Accrued expenses Cash provided by (used in) operating activities Cash and Cash Equivalents, beginning of year Cash and Cash Equivalents, end of year 211 $ (13,93) 196 (265) (89) 6,447 2,82 25 (4,697) 11,875 $ 97, $ 49, ,51 (14) 1,356 6,331 (333) 58,195 43,68 $ 11,875

5 Notes to Reviewed Financial Statements 1. Accounting Organization Policies The Association is a statutory homeowners' association organized as a not-forprofit corporation for the purpose of maintaining and preserving common property, as defined by the Master Deed of Villas of Stonehenge condominium. Villas of Stonehenge condominium consists of 71 residential units located in Oshtemo, Michigan. Accounts Receivable Accounts receivable are assessments due from owners. Management reviews accounts receivable on a monthly basis to determine if any receivables will potentially be uncollectible, however bad debts may still occur. As of December 31, 211 and 21 no allowance for potentially uncollectible accounts was necessary. One owner and two owners made up 11% and 43% of the accounts receivable balance as of December 31, 211 and 21, respectively. Cash and Cash Equivalents For purposes of the Statement of Cash Flows, cash includes cash on hand and held in banks. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Equipment Equipment is stated at cost and is depreciated by accelerated methods over the estimated useful life of the asset, which is 7 years. Subsequent Events Management has evaluated subsequent events through February 24, 212, the date the financial statements were available to be issued. See accompanying independent accountants' review report. 6

6 Notes to Reviewed Financial Statements 2. Owners' Assessments and Fees The annual budget and assessments to owners are determined by the Board of Directors. The assessments are billed to the owners on a monthly basis. The Association retains excess operating funds at the end of the year, if any, for use in future periods. The Association assesses new owners a buy-in fee equal to two times the current monthly maintenance fee. As of December 31, 211 and 21 the buy in fee was $ Future Major Repairs and Replacements The State of Michigan Condominium Act 59 of 1978, Rule provides that the Association shall maintain a reserve fund for major repairs and replacement of common elements which, at a minimum, shall be equal to 1% of the Association's current annual budget on a non-cumulative basis. For the years ended December 31, 211 and 21 the reserve funding requirements were met. Funds are being accumulated based on estimated future costs for future repairs and replacements of common property components. Actual expenditures may vary from the estimated amounts, and the variations may be material. Therefore, accumulated amounts may not be adequate to meet all future needs for major repairs and replacements. If additional funds are needed, the Association has the right, subject to approval by the Board of Directors, to increase regular assessments or delay major repairs and replacements until funds are available. 4. Taxes on Income The Association files income tax returns in the U.S. federal jurisdiction. The Association is no longer subject to U.S. federal income tax examinations by tax authorities for years before 28. The Association makes an annual election under the provisions of the Internal Revenue Code to be treated either as a tax-exempt homeowners' association or as a membership organization. Under the election to be treated as a tax-exempt homeowners' association, taxable income is nonexempt-function income, which consists primarily of interest income. Taxes on income are computed by applying special income tax rates to taxable income. See accompanying independent accountants' review report.

7 Notes to Reviewed Financial Statements Taxes on Income - Continued Under the election to be treated as a membership organization, taxable income is nonmembership income plus the excess of membership income over membership expenses. Taxes on income are computed by applying the regular corporation income tax rates to taxable income. The Association elected to be treated as a tax exempt homeowners' association for 21 land 21. Supplemental Disclosures of Cash Flow Information During the years ended December 31, 211 and 21 the Association paid $346 and $693 in income tax, respectively, and $ in interest. 6. Litigation The Association has filed suit against the developer for defective construction. The Association is claiming damages of approximately $1,7, plus attorney's fees and court costs. In accordance with Statement of Financial Accounting Standards No. 5, the amount of the gain, if any, that may be ultimately realized has not been reflected in the accompanying financial statements. See accompanying independent accountants' review report. 8