2005-12-30_REPORT - M1982155 - Laserfiche WebLink

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chmidt Construction Notes to Divisional Balance Sheet December 31, 2004 Note 1 -Nature of Business and SignMieant Aecouttting Policies The divisional balance sheet of Schmidt Construction (the "Division"), a division of Edw. C. Levy Co. (tha "Parent"), includes the accounts of the Division az of December 31, 2004. The corporate staff of the Parent provides the. Division with certain exeartive, administrative, financial, legal, and general services performed on a centralized bazis. The costs of seMces provided by the Parent's staff are allocated to the DNision. In addition, the Division is allocated a portion of the Parent's employee fringe benefit costs and state and local income taxes. The Division extracts and processes natural aggregates, provides trucking services, manufactures asphalt products, and paves roads, parking lots, and other surfaces in and around Colorado Springs, Colorado. Trade Accounts Receivable -Accounts receivable are stated at net invoice amounts. The Division establishes an allowance for doubtful accounts, based on a specific assessment of all irnoices that remain unpaid following normal customer payment periods. All accounts or portions thereof deemed to be uncollectible are written off in the period that determination is made. No such allowance was deemed necessary at December 31, 2004. Irnentories - InveMOries are stated at the lower of cost or market, with cost determined on the first-in, first-out (FIFO) method for substantially all irnentories. Property, Plant, and Equipment -Property, plant, and equipment are recorded at cost. Depreciation is computed using the straight-line method for buildings and the double-declining balance method for other assets over the estimated useful lives of the assets. DMsbnal Equity -Divisional equity is the accumulated earnings of the DNision slots inception less the allocated portion of Parent's stockholder redemptions. Income Taxes -Pursuant to provisions of the Internal Revenue Code, the Parent haz elected to be taxed az an S Corporation. Generally, the income of an S Corporetlon is not subject to federal Income tax at the corporate level, but rather the stockholders are required to Include a pro rata share of the corporation's taxable income or loss in their personal Income tax returns, Irrespective of whether dividends have been paid. Accordingly, no provision for federal income taxes haz been made in the accompanying dvisional balance sheet.