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; <br />.Y ~ y <br />3. " •. 1, r y'~ ,,.r Y: <br />Notes to Divisional Balance Sheet, Continued <br />2. Accounting Policies, continued: <br />d. Estimates and Assumptions: The preparation of a balance sheet in conformity with <br />generally accepted accounting principles requires management to make estimates and <br />assumptions that affect the reported amounts of assets and liabilities and disclosure of <br />contingent assets and liabilities at the date of the ba]ance sheet. Actual results could differ <br />from those estimates. <br />e. Income Taxes: Effective January 1, 1959, the stockholders of the Parent company elected <br />to have the Parent company taxed as an S-Corporation under the applicable provisions of the <br />Internal Revenue Code. The result of this election is that the Division's taxable income or <br />loss is included in the amounts reported by the Pazent compan~~ to stockholders for inclusion <br />in their personal tax returns. <br />3. Land Contract: <br />Long-term debt at December ?1, 1997 consists of the follo++in~ <br />Land contract, bearing interest a' 7.00 percent, payable m semiannua' instaumena <br />of 581,868, payments applied first to inleres! then to the ur.paic pnnc~pa!. ~~rr <br />the final payment due March 1, 2021 5 1,874.45 <br />Less current portion 33.00. <br />5 t,8~ t.48= <br />The Di+•ision has evaluated fire fair value of its debt based on the curren: interest rate <br />em•irorunent and current pricing of deht intstruments with comparable terms. The cazn~ine <br />value of this debt is considered to approximate fair value. <br />4. Related Party Transactions: <br />Amounts payable to Edw. C. Levy Co. and affiliates, net are the result of vansactions azisin_ <br />out of the normal conduct of business. <br />4 <br />