1966 - Comp. Annual Financial Report
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AUDITgD FINANCIAL STATEMENTS
AND OTHER FINANCIAL INFORMATION
VILLAGE OF SHOREWOOD, MINNESOTA ... LIQUOR FUND
December 31, 1966
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CONTENTS
AUDITED FINANCIAL STATEMENTS:
ACCOUNTANTS i REPORT......'...................................... PAGE :3
STATEMENT OF FINANCIAL POS+TION................o.............. 4
STATEMENT OF EARNINGS AND RETAINED EARNINGS.......o....... 5
OTHER FINANCIAL INFORMATION:
EXAMINATION COMMENTS..o.................................... 6
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ERNST & ERNST
FIRST NATIONAL BANK BLDG.
MINNEAPOLIS, MINN. 55402
AQCOUNTANTS I REPORT
The Village Council
ViHageo~ ShbI'ewood~ "Minnesota
We have examined the statement of financial position of the Village of Shorewood -
Liquor Fund as of December 31, 1966 and the related statement of earnings and
retained earnings for the year then ended. Our examination was made in accordance
with generally accepted auditing standards, and accordingly included such 'tests of
the accounting records and such other audi Hng procedures as )\Ie considered neces....
sary in the circumstances.
In our opinion, the~ompanying statements of financial position and earnings_
and retained earnings present fairly the financial position of the Village of
Shorewood - Liquor Fund at December 31, 1966 and the results of its operations
for the year then ended, in conformity with generally accepted accounting principles
applied on a basis consistent with that of the preceding year.
~,,~
Minneapolis, Minnesota
May 3, 1967
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STATEMENT OF FINANCIAL POSITION
VILLAGE OF SHOREWOOD - LIQUOR FUND
TOTAL CURRENT ASSET S
FIXTURES AND EQUIPMENT - at cost
Furniture. fixtures and equipment
Leasehold improvements
Allowances for depreciation (deduction)
LIABILITIES AND FUND BALANCE
CURRENT LIABILITIES
kt:co'tmtp payable
Payroll taxes and pension contribution
Current portion of long-term debt
TOTAL CURRENT LIABILITIES
LONG-TERM DEBT .. less
current liability'
Municipal Building
July 1, 1968
portion classified as
Revenue Bonds of 1961, 4%, due
FUND BALANCE
Retained earnings
December. 31
1966 1965
$30,475.01
33,212.00
2,491.12
24,343.53
1~0S9.16
191,610.82
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"$22,923.74
ZS,212.00
7,246.31
24,206..66
1:.499.88
$84,088.59
$ 9,729.11 $ 9,694.11
1,&43.45 1,043.45
) 6:Z48.9~) ( ~:1~5.61)
.. 4 23..6. ~ 5 1.95
$96,034.45
$ 5,753.30
2,1'00.21
5..000.00
$12,853.51
5,000.00
78.180.94
$96,034.45
$89,680.54
$ 5,085.35
1,914.43
5 .. 000..00
$11,999.78
10,000.00
67.680.76
$89,680.54
Note - Cash in the amount of. 1966 - $12,300.00, 1965 .. $12,500.00 is restricted
for debt service purposes.
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I Cost of products sold:
Inventory at beginning of year
Purchases, less discounts
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STATEMENT OF EARNINGS AND RETAINED EARNINGS
VILLAGE OF SHOREWOOD - LIQUOR FUND
Net sales:
Liquor and wine
Beer
Miscellaneous
Less inventory at end of year
GROSS MARGIN
Operattng:6f<peases:
Salaries
Payroll taxes and
Rent
Light and power
Telephone
Insurance
employee benefits
Depreciation
Accounting and
Bad debts
Supplies
Office expense
Repairs
other
auditing
Other income (deduction):
Interest income
Interest expense
NET EARNINGS
Retained earnings at beginning of year
Transfers:
To Park Fund
To General Fund
Add depreciation adjustment
RETAINED EARNINGS AT END OF YEAR
( )
Indicates deduction.
Year Enged December 31
1966 1965
ft
$178,152.97
53~176.90
10.023.22
$241,353.09
$ 24,206.66
186.541. 7I
$210,748 :37
24.343.53
~186.404.84
$ 54,948.25
$ 16,678.21
1,557.11
3,583 . 05
939.17
289.70
1,562.07
1,203.32
2, 172 . 00
275 ~'83
501.63
163.73
48.25
t 29.~~~:~~
$ 25,608.79
. 1,403.64 $' 1,050.00
( 12.2 ) ( 712.25)
8 1. j 337.75
26,500.18 $ 19,311.10
67.680.76 45.912.07
$ 94,180.94 $ 65,223.17
( 10,000.00)
( _~.Q01t.OOJ
$' 78,180.94
$161,870.74
47,350.53
9.641.45
$218,862.72
$ 16,405 .48
1 ~54'8. 08
3,724.88
849.50
289.77
1,988.10
:.2 . 4~..i9"
$' 67,680.76
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OTHER FINANCIAL INFORMATION
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ERNST & ERNST
FIR S T N A T ION A L BAN K B LOG.
MINNEAPOLIS, MINN. 55402
EXAMINATION COMMENTS
Village of Shorewood, Minnesota
The audited financial statements of the Village of ShOr.ewood = Liquor Fund an9
OUT report thereon are presi:!nted in the preceding section of this report. The
following comments relate to the details of the scope of our examination and
dur review of accounting procedures and internal controls.
SCOPE OF EXAMINATION
The examination comments in the other financial information included with the
audited statement of ri:!ceipts and disbursements of the various funds of the
Village of Shorewood of the same date cover the scope of our procedures in the
area of cash, cash transactions and certain other areas.
Accounts receivable were supported by tracing tq subsequent payments and by
positive cqnfirmation of selected accounts. Th~ collectibility of accounts
was reviewed and based on this review accounts totaling $2l6.3S were written
off.
We observed the taking of the physical inventory and recorded test counts which
were subsequently traced to the inventory listings. Prices were supported on a
test basis by ~eference to vendors' invoices. Clerical accuracy was verifie~ on
a test basis. ~e also tested the accounts payable cutoff~ We adjust~d the
inventory to a cost basis by eliminating promotional discounts.
We reviewed the property accounts and noted only one small addition. The prd...
vision for depreciation for the year was reviewed and tested.
Accounts payable were supported by direct correspondence with vendors on a test
basis and by sighting dQcumentary evidence.
We examined paid Municipal Revenue Bonds and paid interest coupons thereon. We
received confirmation of the bonds still outstanding.
Sales were reconciled to cash receipts, and other accounts were tested and sup-
ported as deemed necessary.
REVIEW OF ACCOUNTING PROCEDURES AND INTERNAL CONTROLS
In addition to the comments in the other financial information included with the
audited statements of receipts and disbursements of the v~rious funds of same date~
we have the following comments pertaining specifically to the procedures and
internal control of the liquor store operation.
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Bad Checks and Accounts Receivable
We noted an increasing number of bad checks and repeat bad checks from the same
individuals. One individual had six bad checks during the year and also is
carried as an accouhts receivable.
We understand that all credit sales, except several good accounts, are beirtg
stopped with the concurrence of the Council.
The Council should scrutinize the liquor store operation to ascertain that creqit
sales are being handled in accordance with Council wishes and review the policy
af accepting checks from customers.
General
Our work with the liquor store records indicate that the accountant is doing
good work. As the Village Clerk is responsible for the maintenance of the
accounting records, we recommend that she become familiar with the system in use.
~t-~
Minneapolis, Minnesota
May 3, 1967