1971 - Comp. Annual Financial Report
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AUDITED FINANCIAL STATEMENTS
AND OTHER FINANCIAL INFORMATION
VILLAGE OF SHOREWOOD, MINNESOTA -LIQUORFUND
December 31, 1971
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ERNST & ERNST
FIR S T N AT ION A L BAN K B L D G.
MINNEAPOLIS, MINN. 55402
ACCOUNTANTS' REPORT
The Village Council
Village of Shorewood, Minnesota
We have examined the statement of financial position of the Village of Shorewood -
Liquor Fund as of December 31, 1971 and the related statements of earnings and
retained earnings and changes in financial position 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 necessary in the circumstances.
In our opinion, the accompanying statements of financial position and earnings and
retained earnings and changes in financial position present fairly the financial
position of the Village of Shorewood -Liquor Fund at December 31, 1971 and the
results of its operations, changes in financial position and changes in fund balance
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 8, 1972
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STATEMENT OF FINANCIAL POSITION
VILLAGE OFSHOREWOOD -LIQUOR FUND
December 31
1971 1970
$ 7,322.93 $ 6,115.65
874.60 998.22
889.67 814.07
TOTAL CURRENT LIABILITIES $ 9,087.20 $ 7,927.94
83,945.04 90,235.11
$93,032.24 $98,163.05
ASSETS
CURRENT ASSETS
Cash
Savings certificates
Accounts receivable from General Fund
Inventory - at the lower of cost (first-in,
first-out method) or market
Prepaid expenses
$14,144.97
28,500.00
244. 82
39,004.64
2,510.97
$84,405.40
TOTAL CURRENT ASSETS
FIXTURES AND EQUIPMENT - on the basis of cost
Furniture, fixtures and equipment
Leasehold improvements
Allowances for depreciation (deduction)
$17,558.68
3,427.99
( 12,359.83)
$ 8,626.84
$93,032.24
LIABILITIES AND FUND BALANCE
CURRENT LIABILITIES
Accounts payable
Salaries, payroll taxes and pension
contribution
State sales tax
. FUND BALANCE
Retained earnings
$17,253.12
33,500.00
35,712.28
1,415.92
$87,881. 32
$17, 364. 18
3,427.99
( 10,510.44)
$10,281. 73
$98,163.05
_!J._
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STATEMENT OF EARNINGS AND RETAINED EARNINGS
VILLAGE OF SHOREWOOD -LIQUOR FUND
Net sales:
Liquor and wine
Beer
Miscellaneous
Cost of products sold:
Inventory at beginning of year
Purchases, less discounts
Less inventory at end of year
GROSS MARGIN
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
Interest income
NET EARNINGS
Retained earnings at beginning of year
Less transfers to
General Fund
RETAINED EARNINGS AT END OF YEAR
Year Ended December 31
1971 1970
$153,235.24 $185,422.02
51,528.26 55,018.55
15,073.10 15,326.73
$ 219, 836. 60 $255,767.30
$35,712.28 $35,398.95
171,076.39 197,509.25
$206,788.67 $232,908.20
39,004.64 35,712.28
.. $167,784.03 $197,195.92
$ 52,052.57 $ 58,571. 38
$ 25,913.24 $ 24,731.20
3,715.76 3,515.00
6,180.30 6,525.50
1,691.09 1,663.98
297.20 310.38
4,567.91 3,255.75
1,849.39 1,918.36
3,050.00 3,050.00
216.84 203.17
488.36 691.26
297.16 245.01
146.32 507. 61
541. 57 347 . 86
$ 48,955.14 $ 46,965.08
$ 3,097.43 $ 11,606.30
1,612.50 2,612.50
$ 4,709.93 $ 14,218.80
90,235.11 136,016.31
$ 94,945.04 $150,235.11
11,000.00 60,000.00
$ 83,945.04 $ 90,235.11
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STATEMENT OF CHANGES IN FINANCIAL POSITION
VILLAGE OFSHOREWOOD -LIQUORFUND
SOURCE OF WORKING CAPITAL
Net earnings for the year
Provision for depreciation (straight 1 ine
method) not requiring outlay of current
working cap i tal
APPLICATION OF WORKING CAPITAL
Additions to fixtures and equipment
Transfers to general fund
December 31
1971 1970
$ 4,709.93 $ 14,218.80
1,849.39 1,918.36
TOTAL FROM OPERATIONS $ 6,559.32 $ 16,.137.16
DECREASE IN WORKING CAPITAL
INCREASE (DECREASE) IN WORKING CAPITAL,
BYcCQMP0NENT
Cash
Savings certificates
Accounts receivable for
Inventory
Prepaid expenses
Accounts payable
Salaries, payroll taxes and pension
contribution
State sales tax
$ 194.50
11,000.00
$11,194.50
.$ 4,635.18
$ 69 . 95
60,000.00
$ 60,069.95
$ 43,932.79
($ 3,.108.15) ($ 4,422.39)
( 5,000.00) ( 40,000.00)
general fund 244.82
3,292.36 313.33
1,095.05 ( 1,694.78)
( 1,207.28) 1,596.51
Working capital at beginning of year
DECREASE IN WORKING CAPITAL
WORKING CAPITAL AT END OF YEAR
123.62 ( 10.01)
( 75. 60) 284.55
$ 4,635.18 $ 43,932.79
79,953.38 123,886.17
$75,318.20 $ 79,953.38
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OTHER FINANCIAL INFORMATION
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ERNST & ERNST
FIR ST. N AT ION A L BAN K B LOG.
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 nf 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 year-end physical inventory and recorded test
counts which were subsequently traced to the inventory listings. Inventory
pricing was supported on a test basis by reference to vendors' invoices.
Clerical accuracy of the year-end inventory was verified on a test basis. We
also tested the accounts payable cutoff. We tested the retail inventory control
system and observed that it is functioning properly.
We reviewed the property accounts and additions for the year were supported on
a test basis. The provision for depreciation for the year was reviewed and
tested.
Accounts payable at year-end were supported by direct correspondence with ven-
dors on a test basis and by sighting documentary evidence.
Amounts due to the Public Employees Retirement Association and for FICA taxes
were analyzed and adju~ted to the required amounts.
Sales were reconciled to cash receipts, and other accounts were tested and
supported as deemed necessary.
We reviewed the internal controls and accounting procedures used at the village
hall, at the liquor store and by the public accountant who assists the Village
Clerk.
Minneapolis, Minnesota
May 8, 1972
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