1977 - Comp. Annual Financial Report
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CITY OF SHOREWOOD - LIQUOR FUND
REPORT ON EXAMINATION
FOR THE PERIOD
JANUARY 1, 1977 THROUGH DECEMBER 31, 1977
M. J. LONG CO.
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M. J. LONG CO.
ACCOUNTANTS ANO AUOITORS
TONKA BUILOING - EXCELSIOR. MINNESOTA 55331
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TELEPHONE (61 21 474-8826
ACCOUNTANTS' REPORT
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The City Council
City of Shorewood
Shorewood, Minnesota
Gentlemen:
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We have examined the balance sheet of the City of Shorewood-
Liquor Fund, a Minnesota Corporation, as of December 31, 1977 and
1976 and the related statements of income, retained earnings and
changes in financial position for the years then ended. Our
examinations were made in accordance with generally accepted audit-
ing standards, and accordingly included tests of the accounting
records and such other auditing procedures as we considered nec-
essary in the circumstances except as noted in the following para-
grapho
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As discussed in Note 1, the City uses a modified retail
method of valuing its inventories. Because the City does not main-
tain sufficient detail records to support this pricing method, we
were unable to verify the inventory values shown on the accom-
panying financial statements.
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Because of the significance of the matter discussed in the
preceding paragraph, we are unable to express an opinion on the
accompanying financial statements.
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Sincerely,
M. J. LONG COMPANY
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Excelsior, Minnesota
May 25, 1978
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CITY OF SHOREWOOD - LIQUOR FUND
BALANCE SHEET - DECEMBER 31, 1977 and 1976
ASSETS
1977 1976
71,777.01 56,160.39
4,707.38 2,221.31
97,988.53 85,850.44
3,249.19 4,055.34
177,722.11 148,287.48
CURRENT ASSETS
Cash
Receivables -
Trade accounts
Inventories (Note 1)
Prepaid expenses
Total Current Assets
PROPERTY AND EQUIPMENT (Note 1)
Furniture and fixtures
Equipment
Leasehold improvements
Total Assets
15,336.37 15,336.37
7,302.63 5,562.63
3,954.99 3,954.99
26,593.99 24,853.99
( 22,859.08) ( 21,174.64)
3,734.91 3,679.35
181,457002 151,966.83
Less - Accumulated depreciation
Total Property and Equipment
LIABILITIES AND FUND BALANCE
CURRENT LIABILITIES
Accounts payable
Payroll taxes
Sales taxes
Total Current Liabilities
29,341.97
3,060.70
3,211.67
35,614.34
28,259.38
2,151.83
3,007.38
33,418.59
FUND BALANCE
Retained earnings, per accompanying
statement
145,842.68
118,548.24
Total Liabilities and
Fund Balance
181,457.02
151,966.83
See Notes to Financial Statements
M. J. LONG CO.
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CITY OF SHOREWOOD - LIQUOR FUND
STATEMENT OF RETAINED EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1977 and 1976
1977 1976
RETAINED EARNINGS
BALANCE, beginning of year 118,548.24 87,882.32
ADD (DEDUCT)
Net income 27,294044 30,665.92
BALANCE, end of year 145,842.68 118,548.24
See Notes to Financial Statements
M. J. LONG CO.
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CITY OF SHOREWOOD - LIQUOR FUND
STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE YEARS ENDED DECEMBER 31. 1977 and 1976
WORKING CAPITAL WAS PROVIDED FROM:
Operations -
Net income
Add - depreciation, a non-cash
charge
Total from operations
Total Provided
WORKING CAPITAL WAS USED FOR
Purchase of property and equipment
Total Used
Increase (decrease) in working
capital
INCREASE IN WORKING CAPITAL WAS
REPRESENTED BY:
Increase (decrease) in current assets
Cash
Receivables
Inventories
Prepaid expenses
Total
(Increase) decrease in current
Accounts payable
Payroll taxes
Sales taxes
1977
27,294.44
1.684.44
28.978.88
28.978.88
1.740.00
1,740.00
27,238088
15,616.62
2,486007
12,138009
( 806.15)
29.434.63
liabilities
( 1,082.59)
( 908087)
( 204.29)
Increase (decrease) in
working capital
27,238.88
See Notes to Financial Statements
M. J. LONG CO.
1976
30,665.92
2,192090
32,858.82
32.858.82
32g858.82
3,806.81
( 4,238.51)
3,254.14
346.37
3,168.81
27,874.38
( 357.37)
~173000
32,858.82
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CITY OF SHOREWOOD - LIQUOR FUND
COMBINED STATEMENTS OF INCOME
FO~HE YEARS ENDED DECEMBER 31. 1977 and 1976
INCOME
SALES
Liquor and wine
Beer
Miscellaneous
Less refunds
COST OF SALES
Gross martin
Percent to sales
OPERATING EXPENSES
Salaries
Payroll taxes and employee benefits
Rent
Utilities
Telephone
Insurance
Advertising
Bad Debts
Depreciation
Professional services
Supplies
Office expense
Repairs
Security
Employee reimbursements
Other
Total Operating Expenses
Operating income
OTHER INCOME, principally interest
Net income
1977
1976
414,278.86 376,418.87
208,346.04 203,081. 93
36,995.03 37,450.23
( 3.383.31) ( 3.907.03)
656,236.62 613,044.00
500.539.29 465.329.48
155,697.33 147,714.52
23.73% 24.1%
57,154.63 50,170.13
9,473.15 9,549.11
28,658.65 28,370020
5,780.27 5,632.79
1,002052 853.47
9,276.13 6,457.91
732.07 555.97
545.56
1,684.44 2,192.90
7,880.80 6,814.03
2,301. 24 1,566096
271.15 342.29
1,306.75 1,730.94
965.98 1 , 243050
1,371. 75 1,284.17
1.374.06 1,012.76
129.779.15 117,777.13
25,918.18 29,937.39
1.376.26 728.53
27,294.44 30,665.92
See Notes to Financial Statements
M. J. LONG CO.
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CITY OF SHOREWOOD - LIQUOR FUND
NOTES TO FINANCIAL STATEMENTS
. DECEMBER 31, 1977
1.
Summary of Significant Accounting Policies
Property and Equipment -
Property and Equipment is stated at cost. Additions and
improvements are capitalized while maintenance and repair
expenditures are expensed currently. Upon retirement, the
cost and related accumulated depreciation is removed from the
accounts and any gain or loss is included in income.
Depreciation is calculated on a straight line basis over
the estimated lives of the assets which are as follows:
Furniture and Fixtures
Equipment
Leasehold Improvements
5 years
3-10 years
10 years
Inventories
The City uses a modified retail method for valuing
inventories 0
2.
Lease Commitments
The City leases its Vine Hill store facility under a
five year agreement to November, 1982 at annual rentals of
$7,080. In addition, the City is required to pay one half
of any increase in real estate taxes over those paid in 1977.
The City leases its Village Shopping Center store under a
three year agreement to May, 1978 at annual rentals of $14,643.
Four successive three year options to renew are available to
May, 19900 In addition, the City leases certain fixtures with
a cost of $20,000 under a fifteen year agreement to May, 1990
at annual rentals of $2,5800
M. J. LONG CO.