1968 - Comp. Annual Financial Report
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AUDITED FINANCIAL STATEMENTS
AND OTHER FINANCIAL INFORMATION
VILLAGE OF SHOREWOOD, MINNESOTA - LIQUO~ FUND
December 31, 1968
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CONTENTS
AUDITED FINANCIAL STATEMENTS:
ACCOUNTANTS' REPORT.......................................
STATEMENT OF FINANCIAL POSITION...........................
STATEMENT OF EARNINGS AND RETAINED EARNINGS...............
OTHER FINANCIAL INFORMATION:
EXM1.INATION CO~NT s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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ERNST & ERNST
FIR 5 T N AT ION A L BAN K B L D G.
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MINNEAPOLIS, MINN. 55402
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ACCOUNTANTS I REPORT
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The Village Council
Village of Shorewood, Minnesota
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We have examined the statement of financial position of the Village of Shorewood -
Liquor Fund as of December 31, 1968 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 auditing procedures as we considered neces-
sary in the circumstances.
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In our opinion, the accompanying statements of financial position and earnings
and retained earnings present fairly the financial position of the Village of
Shorewood - Liquor Fund at December 31, 1968 and the results of its operations and
changes in fund balance for the year then ended, in conformity with generally
accepted accounting principles applied on a basis co istent with th of the
preceding year.
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Minneapolis, Minnesota
May 16, 1969
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$ 6,544.61 $ 6,863.81
2,321.55 3,535.72
1,188.60
Note B 5,000.00
TOTAL CURRENT LIABILITIES $ 10,054.76 $15,399.53
102,006.60 84,106.27
$112,061.36 $99,505.80
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STATEMENT OF FINANCIAL POSITION
VILLAGE OF SHOREWOOD - LIQUOR FUND
ASSETS
CURRENT ASSETS
Cash - Note A
Savings certificates
Accounts receivable
Inventory - at the lower of cost (first-in,
first-out method) or market
Prepaid expenses
TOTAL CURRENT ASSETS
FIXTURES AND EQUIPMENT - on the basis of cost
Furniture, fixtures and equipment
Leasehold improvements
Allowances for depreciation (deduction)
LIABILITIES AND FUND BALANCE
CURRENT LIABILITIES
Accounts payable
Salaries, payroll taxes and pension
contribution
State sales tax
Current portion of long-term debt -
FUND BALANCE
Retained earnings
December 31
1968 1967
$ 31,657.19 $29,266.02
33,500.00 23,500.00
58.86 571.41
30, 885. 19 28,314.18
1,922.15 1,918.65
$ 98,023.39 $83,570.26
$ 17,294.23 $17,259.73
3,427.99 3,427.99
( 6,684.25) ( 4,752.18)
$ 14,037.97 $15,935.54
$112,061.36
$99,505.80
Note A - Cash in the amount of $12,100.00 was restricted for debt service purposes in 1967.
Note B - Current portion Municipal Building Revenue Bonds of 1961, 4%, retired July 1, 1968.
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STATEMENT OF EARNINGS AND RETAINED EARNINGS
VILLAGE OF SHOREWOOD - LIQUOR FUND
Year Ended December 31
1968 1967
Net sales:
Liquor and wine
Beer
Miscellaneous
$237,997.00.
72,459.07
13,204.45
$323,660.52
$ 28,314.18
249,663.46
$277 ,977.64
30,885.19
$247,092.45
GROSS MARGIN $ 76,568.07
$ 21,365.90
2,475.75
5,892.00
1,815.64
336.69
3,348.90
Cost of products sold:
Inventory at beginning of year
Purchases, less discounts
Less inventory at end of year
Operating expenses:
Salaries
Payroll taxes and employee benefits
Rent
Light and power
Telephone
Insurance
Depreciation
Accounting and auditing
Bad debts
Supplies
Office expense
Repairs
Other
1,932.07
2 ~ 441. 00
40.51
573.57
275.99
71.00
389.47
$ 40,958.49
$ 35,609.58
$ 1,400.00
( 109.25)
$ 1,290.75
$ 36,900.33
84,1{)6.27
$121,006.60
Other income (deduction):
Interest income
Interest expense
Loss on sale of fixtures and equipment
NET EARNINGS
Retained earnings at beginning of year
Transfers:
To Special Assessments 65-1
To Park Fund
To General Fund
From Special Assessments 65-1
From General Fund
RETAINED EARNINGS AT END OF YEAR
( ) Indicates deduction.
$201,080.17
60,704.64
10,338.31
$272,123.12
$ 24,343.53
213,415.30
$237,758.83
28,314.18
$209,444.65
$ 62,678.47
$ 20,552.24
2,177.55
5,085.53
1,333.63
310.59
2,404.42
1,340.68
2,399.00
426.90
482.08
341.09
2.99
397.12
$ ~7,253.82
$ 25,424.65
$ 1,375.50
( 312.25)
( 1,562.57)
($ 499.32)
$ 24,925.33
78,180.94
$103,106.27
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OTHER FINANCIAL INFORMATION
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ERNST & ERNST
FIR S T N AT ION A L BAN K B L D G.
MINNEAPOLIS, MINN. 55402
EXAMINATION COMMENTS
Village of Shorewood, Minnesota
The audited financial statements of the Village of Shorewood - Liquor Fund and
our report thereon are presented in the preceding section of this report. The
following comments relate to the details of the scope of our examination and
our review of accounting procedures and internal controls.
SCOPE OF EXAMINATION
The examination comments in the other financial information included with the
audited statement of receipts 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.
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 reference to vendors' invoices. Clerical accuracy was verified on
a test basis. We also tested the accounts payable cutoff. We adjusted the
inventory to a cost basis by eliminating promotional discounts.
We reviewed the property accounts and additions were supported on a test basis.
The provision 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 documentary evidence.
We examined paid Municipal Revenue Bonds of 1961 and paid interest coupons thereon,
and the payment of bonds during the year was confirmed to us by the paying agent.
Sales were reconciled to cash receipts, and other accounts were tested and sup-
ported as deemed necessary.
REVIEW OF ACCOUNTING PROCEDURES AND INTERNAL CONTROLS
We reviewed the internal controls and accounting procedures used at both the
village hall and the liquor store. Generally the internal controls appear to be
adequate. We observed that the receipts at the liquor store were not deposited
on a regular basis. We recommend that deposits be made at more frequent intervals,
preferably on a daily basis.
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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 i1iar with the system in use.
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Minneapolis, Minnesota
May 16, 1969
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