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<br />Schmidt Construction <br />(division o/ Edw. C. Levy Co.) <br />Notes to Divisional Balance Sheet <br />1. Basis of Presentation and Operations: <br /> <br />Effective December 31, 1988, Schmidt Construction (tlte "Division") was merged into Ed+v. C. <br />Levy Co. (the "Parent company") and became a division. Its separate corporate existence <br />ceased. <br />The divisional balance sheet includes al] of the accounts of the division as of December 31. <br />1997. The corporate staff of the Parent company provides the Division with certain executive. <br />administrative, financial, legal and general sen ices performed on a centralized basis. <br />The Division extracts and processes natural aggregates, provides trucktne services. <br />manufactures asphalt products and paves roads. parkine lots and other surfaces in and aro~~nd <br />Colorado Springs, Colorado <br />2. Accounting Policies: <br />a. Cash Equivalents: For purposes of the dicisiona! statement of cash flo++'s. the di+isn:. <br />considers all highly' liquid instruments purchases ++i:h a maturih. date of three months o- <br />less to be cash eoui+alerns. <br />b. lnventon Valuation: Inventories arc stated a; the lover of cost or mark::. Cos: is <br />determined using the first-in, first-out ("F1F0") method for substantiall~~ all in+enton. <br />c. Propem, Plant and Equipment: Prot enies are recorded at cos; and include expendnures <br />for new facilities and those .which materiallc extend the useful lives of existing equipment. <br />Upon retirement or disposal of property, plant and equipme~:, the cos; aid relzted <br />accumulated depreciation are eliminated from the respective accounts. <br />Property, plant, and equipment are depreciated over the estimated useful lives of the assets <br />using either the straieht-line or double-declining balance method. The general range of lies <br />is as follo++s: <br />Years <br />Machinery and equipment <br />Transportation equipment <br />Furniture and fixtures <br />5to7 <br />5to7 <br />Sto7 <br />3 <br />