1973 - Comp. Annual Financial Report
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AUDITED STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
AND OTHER FINANCIAL INFORMATION
VILLAGE OF SHOREWOOD, MINNESOTA
December 31, 1973
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CONTENTS
AUDITED STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS:
ACCOUNTANTS' REPORT...........................................
STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS..................
OTHER FINANCIAL INFORMATION:
ACCOUNTANTS' REPORT ON OTHER FINANCIAL INFORMATION, AND
EXAMINATION CCJt.1MENTS.........................................
DETAIL OF CASH RECEIPTS.......................................
DETAIL OF CASH DISBURSEMENTS... . . . . . . . .. . . . . . . . . . . . . . . . . . . . . ..
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ERNST & ERNST
FIR 5 T N AT ION A L BAN K B L D G.
MINNEAPOLIS. MINN. 55402
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ACCOUNTANTS' REPORT
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To the Village Council
Village of Shorewood, Minnesota
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We have examined the statement of cash receipts and disbursements arising
from cash transactions of the various funds of the Village of Shorewood
for the year ended December 31, 1973. Our examination was made in accor-
dance 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.
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In our opinion, the accompanying statement of cash receipts and disburse-
ments summarizes fairly the cash transactions of the various funds of the
Village of Shorewood for the year ended December 31, 1973.
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w+~
Minneapolis, Minnesota
May 21, 1974
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STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
VILLAGE OF SHOREWOOD
Year Ended December 31, 1973
Funds
General Fund
Special Assessment and Improvement Fund
Metropolitan Sewer Board
Federal Revenue Sharing Trust Fund
Sanitary Sewer and Water Operating Fund
(formerly Sanitary Sewer Operating Fund)
Park Capital Improvement Fund
Utility Improvement Contingency Fund
Improvement Bond Sinking Fund
(formerly Sanitary Sewer Improvement Bond Sinking Fund)
Sanitary Sewer Improvement No. 1969-l-1A Construction Fund
Sanitary Sewer Improvement No. 1969-1B-1C-1D Construction Fund
Water Improvement No. 1973-LW1-LW2 Construction Fund
Liquor Fund
Balance at December 31, 1973 consists of:
Working fund
Demand deposits
Savings certificates
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Balance
January 1, 1973 I
$ 69,888.46
159.12 I
514.26
7,797.00 I
6,122.05 I
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292,209.13 I
435,241.99 I
1,134,306.87
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37,493.81
$1,983,732.69 I
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I Receipts
$ 258,579.53
I 1,537.77
15,482.00
I 20,528.00
I 63,176.02
625.00
I 9,936.38
I 845,412.55
I 942,108.10
I 78,500.00
213,181.67
I $2,449,067.02
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Balance
Transfers In Transfers Out Disbursements December 31, 1973
$ 34,441. 51 $ 294,998.61 $ 67,910.89
76.15 1,620.74
7,848.61 8,147.65
20,442.13 7,882.87
19,692.28 49,605.79
625.00
9,936.38
300,573.37 837,048.31
$398,337.57 8,104.50 28,799.92
398,337.57 34,441. 51 2,382,796.45 57 , 514 . 58
58,455.41 20,044.59
212,777.24 37,898.24
$432,779.08 $432,779.08 $3,305,764.75 $1,127,034.96
$ 600.00
196,422.68
930,012.28
$1,127,034.96
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ERNST & ERNST
FIR 5 T N AT ION A L 8 A N K 8 L D G.
MINNEAPOLIS. MINN. 55402
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ACCOUNTANTS' REPORT OF OTHER FINANCIAL
INFORMATION, AND EXAMINATION COMMENTS
Village of Shorewood, Minnesota
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The audited statement of cash receipts and disbursements of the various funds
of the Village and our report thereon are presented in the preceding section
of this report. The financial information presented hereinafter was derived
from the accounting records tested by us as part of the auditing procedures
followed in our examination of the aforementioned statement of cash receipts
and disbursements and, in our opinion, it is fairly presented in all material
respects in relation to the statement of cash receipts and disbursements taken
as a whole; however, it is not necessary for a fair presentation of the state-
ment of cash receipts and disbursements of the Village.
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SCOPE OF EXAMINATION
We proved the reconcilement of the clerk's cash balances in the various
funds with the amounts reported directly to us by the depository at the
beginning and end of the year. We reconciled recorded cash receipts and
disbursements with amounts shown by the bank statements on file. Confir-
mation of the following cash receipts was obtained directly from the source:
property taxes and special assessments, state cigarette and liquor taxes,
Hennepin County Municipal Court fines, and local government aid. We supported
other cash receipts on a test basis. Cash disbursements were supported and
distribution reviewed for selected periods by examination of claims, invoices
or other supporting data.
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Contracts, agreements and the Village Council minutes were reviewed by us.
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We reviewed the internal controls and accounting procedures in use.
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GENERAL
We noted that the bank's pledge of security for Village deposits does not
meet the requirements of applicable statutes. At year-end 90% of the market
value of securities pledged (plus FDIC insurance) approximated $971,294 com-
pared to cash and savings certificates on deposit of $1,139,271.
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We noted that $726.73 in property taxes receipts attributable to the
Metropolitan Sewer Board Fund have been improperly classified as General
Fund homestead tax aid receipts. This error should be corrected in 1974.
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Refer to separate report of same date covering the Village of Shorewood -
Liquor Fund for additional comments.
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Wcf~
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Minneapolis, Minnesota
May 21, 1974
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DETAIL OF CASH RECEIPTS
VILLAGE OF SHOREWOOD
Year Ended December 31, 1973
Property taxes and assessments
Homestead tax aid
State cigarette and liquor taxes
Local tax aid
Permits and licenses:
Building, well and sewer permits
Liquor licenses
Dog licenses and pound fees
Other
Hennepin County Municipal Court fines
Charges for current services
Revenues collected for other
governmental agencies
Federal revenue sharing
Sewer and water hook-up permits
Sewer service charges
Sale of water meters
Contractor registration fees
Subdivision plats
Donations
Special improvements not assessed
Collections for other funds:
Special assessments and Improve-
ment Fund levy prepayment
Interest
Prepayments on assessments
HUD grant
Bond proceeds
Merchandise sales and miscellaneous
Other
TOTAL
General
Fund
$109,146.59
24,780.45
15,759.32
59,943.44
7,837.75
5,355.00
1,183.00
696.00
4,138.00
11,090.48
10,680.75
7,968.75
$258,579.53
Specia 1
Assessment
and
Improvement
Fund
$1,537.77
$1,537.77
Metropolitan
Sewer Board
$15,482.00
$15,482.00
Federal
Revenue
Sharing
Trust Fund
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$20,528.00
$20,528.00
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I Sanitary
Sewer Water
I Sanitary Improvement Improvement
Sewer and Park Utility Improvement No. 1969-1B- No. 1973-LW1-
Water Capital Improvement Bond 1C-1n LW2
I Operating Improvement Contingency Sinking Construction Construction Liquor
Fund Fund Fund Fund Fund Fund Fund
$496,106.40
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I $48,920.00
I 10,669.02
1,350.00
425.00
$600.00
I 25.00
$8,912.50
I 1,023.88
27,770.00 $ 41,608.60
I 320,931.21
900,000.00
I 604.94 $78,500.00
$213,181.67
1,812.00 499.50
I $63,176.02 $625.00 $9,936.38 $845,412.55 $942,108.10 $78,500.00 $213,181.67
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DETAIL OF CASH DISBURSEMENTS
VILLAGE OF SHOREWOOD
Year Ended December 31, 1973
General
Fund
General government:
Mayor, council, clerk-treasurer and
assessor salaries and expenses $ 20,164.33
Legal, accounting and
engineering services 26,564.92
Operation and maintenance
of buildings 1,313.93
Election expense 441. 06
Capital outlay 60.00
$ 48,544.24
Public safety:
Police protection $ 76,687.98
Fire protection 12,524.12
Building inspection 2 , 541. 58
Animal control 2.701.30
$ 94,454.98
Highways:
Salaries $ 29,330.64
Engineering 793.22
Truck and equipment expense 7,320.74
Materials and supplies 2,937.77
Contract labor and services 891.02
Capital outlay 1,572.95
Street lighting 2,204.43
Rental expense 360.00
$ 45,410.77
Sanitation and waste removal:
Storm sewers and drainage $ 125.90
Capital outlay 4,146.18
Weed eradication 1,334.32
Other 92.50
$ 5,698.90
Health and welfare:
Nursing service $ 1,435.82
Direct relief 2,228.68
$ 3,664.50
Recreation and parks:
Salaries $ 5,342.02
Contracted services 916.38
Capital outlay 914.86
Other 952.53
$ 8,125.79
Economic opportunity:
Community services 1,900.00
Insurance 5, 877 . 00
Special
Assessment
and
Improvement
Fund
Metropolitan
Sewer Board
Federal
Revenue
Sharing
Trust Fund
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$ 1,448.47
13,807.35
5,186.31
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I Sanitary
Sewer
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Water
Operating
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Improvement
Bond
Sinking
Fund
Sanitary
Sewer
Improvement
No. 1969-1-1A
Construction
Fund
Sanitary
Sewer
Improvement
No. 1969-1B-
lC-lD
Construction
Fund
Water
Improvement
No. 1973-LWl-
LW2
Construction
Fund
Liquor
Fund
DETAIL OF CASH DISBURSEMENTS (Cont'd)
Employee taxes and health insurance
Revenues collected for other
governmental agencies
Sewer construction expenditures -
General Fund expenditures to be
reimbursed by Sanitary Sewer
Improvement No. 1969-1B-1C-1D
Construction Fund:
Salaries
Legal services
Travel expense and mileage
Other
Water construction expenditures -
General Fund expenditures to be
reimbursed by Water Improvement
No. 1973 -LW1-LW2 Construction
Fund - for legal services
Special assessment - Hennepin
County levy charges
Metropolitan Sewer Board charges
Sewer and water operating:
Salaries
Supp lies
Electricity expense
Other
Capital outlay
Sanitary sewer construction -
debt service:
Interest
Fiscal agent charges
Refund of prepaid assessments
Sanitary sewer and water
construction:
Engineering and surveying costs
Legal services and bond
issuing expense
Easements and land acquisitions
Payments to contractors
Other
Liquor store:
Merchandise purchases
Salaries and employee benefits
Other
TOTAL
General
Fund
$ 15,253.01
8,927.75
$ 55,264.60
757.50
481.80
571. 92
$ 57,075.82
65.85
$294,998.61
Special
Assessment
and
Improvemen t
Fund
$
76.15
$
76.15
Metropolitan
Sewer Board
$7,848.61
$7,848.61
Federal
Revenue
Sharing
Trust Fund
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$20,442.13
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AUDITED FINANCIAL STATEMENTS
AND OTHER FINANCIAL INFORMATION
VILLAGE OF SHOREWOOD, MINNESOTA - LIQUOR FUND
December 31, 1973
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CONTENTS
AUDITED FINANCIAL STATEMENTS:
ACCOUNTANTS' REPORT...........................................
STATEMENT OF FINANCIAL POSITION...............................
STATEMENT OF OPERATIONS AND RETAINED EARNINGS.................
STATEMENT OF CHANGES IN FINANCIAL POSITION....................
NOTES TO FINANCIAL STATEMENTS.................................
OTHER FINANCIAL INFORMATION:
EXAMINA TION COMMENTS..........................................
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S.liL!i,:JS: lNille
L~~SS: Cost of Sales
S,ALT:~S: J[5eer
L,GSS: Cost of Sa.J.es-Il'eer
S:\LG'3: l/liscellaneous
JJ~S3: Cost of Sell eS-l;.:Ii sc .
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To-Lttl {)verhel:1d
Total
NET O~PIJ:"^:U\,TII'TS- Je'.']rt(rFI~.l'1
(Loss)
Pronwtional Discounts
Discounts Earned
Interest Income
NTcrr P:t.:~OJF'IIJP
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4,717.91
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SHORE'NOOD 1!UNICIPAL LIQUOR STORE
OPEHATING STATEMENT
JANUARY I, THRU APRIL 30. 1973
yii'...JJffi TO DATE
SALES-Liquor & Wine
LESS: Cost of Sales-Liquor & Wine
SALES-Beer
LESS: Cost of Sales-Beer
SAL"ES-Mi see llan e ous
LESS: Cost of Sales-Misc.
GROSS PROFIT
OmRATING EXPBNSE:
Selling Expenses
Salaries-Manager
Salaries-Clerk
Advertising
Payroll Taxes
Supplies
Total Selling Expenses
OVERHEAD EXPEt\iSES:
Accounting
Depreciation
Heat
Insurance-Regular
Health
Light & Power
Hauling
Supplies
Office Expense
Repairs & Maintenance
Salaries-Clerical
Rent
Telephone
Total Overhead Expense
Total Expense
NET OPERATING PROFl'f OR (LOSS)
Promotional Discounts
Discounts Earned
Interest Income
NET PROFIT OR (LOSS)
$33,7/,t/,t.04
28.552.56
g,527.82
10.897.12
/,t,290./,t2
3.1.178.83
3,800.00
/,t,g5.60
72.75
573.53
81.79
/,t95.00
513.56
67.39
1,306.00
591.02
/,t31./,t6
12.00
67.10
7/,t.3/,t
56.20
100.00
2,285.00
96.48
2,1/,t5.51
16/,t.76
3/,t3.75
$ 5,191./,t8
3,630.70
811. /,t9
9,633.67
8,673.67
6.095.55
1/,t,769.22
(5,135.55)
2,65/,t.02
$(2.481.53)
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SHOR@NOOD MUNICIPAL LIQUOR STORE
OPERATING STATEMENT -. ~ ANAL'YSIS
JANUARY 1 THRU APRIL 30. 1973
YEAR TO DATE
$52,562.28 100.00%
33,744.04
28.552.56 84.62
5,191.48 15.38
14,527.82
10.897.12 75.01
3,630.70 24.99
4,290.42
3.478.93 81.09
811.49 18.91
42.928.61 81.67
9,633.67 18.33
8,673.67 16.50
6.095.55 1l.6o
14,769.22 28.10
$(5,135.55) (9.77)%
2,310.27 4.40
343.75 .65
2,654.02 5.05
$(2.481.53) (4.72)%
TOTAL SALES
SAlES-Liquor & Wine
LESS: COST OF SALES-Liquor & Wine
GROSS PROFIT
SALES-Beer
LESS: COST OF SAmS-Beer
GROSS PROFIT
SAlES-Miscellaneous
LESS: COS'I' OF SALES-Misc.
GROSS PROFIT
TOTAL COST OF SALES
GROSS PROFIT
Total Selling Expenses
Total Overhead Expenses
Total Expenses
NET OPEHATING PROFIT OR (LOSS)
Additions & Deductions:
Net Discounts
Interest Income
Total
NET PROFIT
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SHOREWOOD MUNICIPAL LIQUOR STORE
BALANCl!] SHEET
APRIL 30. 1973
ASSETS
CURRENT ASSETS
Cash on Hand
Cash in Bank
Certificate on Deposit
Accounts Receivable-General Fund
Inventory-Liquor & Wine
Beer
Miscellaneous
Total Current Assets
FIXED ASSETS
Furniture & Fixtures
Leasehold Improvements
Equipment
Sign
COST
$14,039.72
3,427.99
2,390.06
1.128.90
RESEllVE
$9,166.44
2,379.96
1,922.19
991.36
Total Fixed Assets
PREPAID ASSETS
Insurance
Returned or Bad Checks
Total Prepaid Assets
Total Assets
LIABILITIES & NET WORTH
CU~~NT LIABILITIES
Accounts Payable
ACCRUED LIABILITIES
Withholding Taxes-Federal & State
Payroll Taxes-PERA & FICA
Cash Over & Short
Sales Tax
Salaries
Total Accrued Liabilities
Total Liabilities
NET VVQRTH
Surplus
Less: Transfer of Funds-General & Park
Profit 1/1/73 thru 4/30/73
Total Liabilities & Net Worth
$ 600.00
10,065.76
23,500.00
244.82
$34,504.08
2,373.74
1.520.82 38 .398.6'i
72,809.22
NET
4,873.28
1,048.03
467.87
137.54
6,526.72
979.50
115.88
1.095.38
$80,431.32
$ 5,745.63
$ 339.70
171.78
~.56
504.93
25.00
1,047.97
6,793.60
223,719.25
147.600.00
76,119.25
(2,481.53) 73,637.72
$80,431.32
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ERNST & ERNST
FIR 5 T N AT ION A L 8 A N K 8 L D G.
MINNEAPOLIS, MINN. 55402
ACCOUNTANTS' REPORT
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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, 1973 and 1972 and the related
statements of operations and retained earnings and changes in financial
position for the years then ended. Our examinations were made in accor-
dance with generally accepted auditing stand~rds, and accordingly included
tests of the accounting records and such other auditing procedures as we
considered necessary in the circumstances.
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In our opinion, the accompanying statements of financial position and
operations and retained earnings and changes in financial position present
fairly the financial position of the Village of Shorewood - Liquor Fund at
December 31, 1973 and 1972 and the results of its operations, changes in
financial position and changes in fund balance for the years then ended, in
conformity with generally accepted accounting principles appl~ed on a
consistent basis.
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Minneapolis, Minnesota
May 21, 1974
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STATEMENT OF FINANCIAL POSITION
VILLAGE OF SHOREWOOD - LIQUOR ,FUND
December 31
1973 1972
$ 6,760.12 $ 6,500.79
contribution 956.43 857.54
928.35 863.85
TOTAL CURRENT LIABILITIES $ 8,644.90 $ 8,222.18
81,482.22 81,696.53
$90,127.12 $89,918.71
ASSETS
CURRENT ASSETS
Cash
Savings certificates
Accounts receivable from General Fund
Inventory - Note A
Prepaid expenses
$14,398.24
23,500.00
5,244.82
39,845.65
1,638.98
$84,627.69
$17,558.68
3,427.99
( 15,487.24)
$ 5,499.43
$90,127.12
TOTAL CURRENT ASSETS
FIXTURES AND EQUIPMENT - Note A
Furniture, fixtures and equipment
Leasehold improvements
Allowances for depreciation (deduction)
LIABILITIES AND FUND BALANCE
CURRENT LIABILITIES
Accounts payable
Payroll taxes and pension
State sales tax
FUND BALANCE
Retained earnings
See notes to financial statements.
$13,993.81
23,500.00
5,244.82
37,727.16
2,412.64
$82,878.43,
$17,558.68
3,427.99
( 13,946.39)
$ 7.040.28
$89,918.71
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STATEMENT OF OPERATIONS 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
Supp lies
Office expense
Repairs
Other
Other income:
Miscellaneous
Interest
Retained ~arnings at beginning of year
NET EARNINGS (LOSS)
Less transfers to special assessment and
improvement fund
RETAINED EARNINGS AT END OF YEAR
See notes to financial statements.
Year Ended December 31
1973 1972
$126,286.81 $139,486.15
62,595.27 55,070.96
16.617.25 17.313.39
$205,499.33 $211,870.50
$ 37,727.16 $ 39,004.64
162.542.87 161.585.89
$200,270.03 $200,590.53
39.845.65 37.727.16
$160.424.38 $162.863.37
$ 45,074.95 $ 49,007.13
$ 24,279.72 $ 25,744.68
4,195.79 3,659.59
6,453.00 6,160.67
1,761.65 1,774.62
354.16 362.27
2,686.67 3, 941. 58
1,540.85 1,586.56
3,065.00 3,060.00
401. 97
592.46 417.30
280.40 206.79
479.59 320.60
490.50 600.54
$ 46,581. 76 $ 47,835.20
($ 1 , 506 . 8 1) $ 1,171.93
$ $ 279.56
1,292.50 1.300.00
$ 1,292.50 $ 1,579.56
($ 214 .31 ) $ 2,751.49
81.696.53 83.945.04
$ 81,482.22 $ 86,696.53
5,000.00
$ 81,482.22 $ 81,696.53
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STATEMENT OF CHANGES IN FINANCIAL POSITION
VILLAGE OF SHOREWOOD - LIQUOR FUND
Year Ended December 31
1973 1972
SOURCE OF FUNDS
Net earnings (loss) for the year ($ 214.31) $ 2,751.49
Provision for depreciation not requiring
outlay of current working capital 1,540.85 1,586.56
TOTAL FROM OPERATIONS $ 1,326.54 $ 4,338.05
USE OF FUNDS
Transfers to other funds 5,000.00
INCREASE (DECREASE) IN WORKING CAPITAL $ 1,326.54 ($ 661. 95)
INCREASE (DECREASE) IN WORKING CAPITAL,
BY COMPONENT
Cash
Savings certificates
Accounts receivable for general fund
Inventory
Prepaid expenses
Accounts payable
Salaries, payroll taxes and pension contribution
State sales tax
INCREASE (DECREASE) IN WORKING CAPITAL
Working capital at beginning of year
$ 404.43
(
(
(
(
2,118.49
773.66)
259.33)
98.89)
64.50)
$ 1,326.54
74,656.25
$75,982.79
WORKING CAPITAL AT END OF YEAR
See notes to financial statements.
($ "151.16)
( 5,000.00)
5,000.00
( 1,277 .48)
( 98.33)
822.14
17 . 06
25.82
($ 661.95)
75,318 .20
$74,656.25
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NOTES TO FINANCIAL STATEMENTS
VILLAGE OF SHOREWOOD - LIQUOR FUND
December 31, 1973 and 1972
Note A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Inventories: Inventories are stated at the lower of cost (first-in, first-out
method) or market.
Fixtures and equipment: Fixtures and equipment are stated at cost. Maintenance
and repairs which do not improve or extend the life of the respective assets
are expensed currently. Depreciation of fixtures and equipment is provided for
on the straight line method by charging against earnings amounts sufficient to
amortize the cost of properties over their estimated useful lives. When pro-
perties are retired or disposed of the related costs and allowances for
depreciation are removed from the respective accounts, and any profit or loss
on disposition is included in the statement of earnings.
Note B - LEASE COMMITMENTS
The Liquor Fund leases its store facilities for which it has a minimum rental
commitment as of December 31, 1973 of $5,700 per year for 1974 through 1976
and $2,375 for 1977. In addition, the lease provides for the payment of one-
half of any increase in real estate taxes over the amount in 1967 when the
lease was negotiated. Such contingent rentals were $248 and $225 in 1973 and
1972, respectively.
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ERNST & ERNST
FIR S T N AT ION A L BAN K B LOG.
MINNEAPOLIS, MINN. 155402
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EXAMINATION COMMENTS
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Village of Shorewood, Minnesota
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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.
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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.
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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 reviewed the property accounts and reviewed and tested the provision for
depreciation for the year. There were no property additions for the year.
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Accounts payable at year-end were supported by direct correspondence with
vendors on a test basis and by sighting documentary evidence.
Amounts due to the Public Employees Retirement Association and for FICA
taxes were analyzed and supported by sighting documentary evidence.
Sales were reconciled to cash receipts, and other accounts were tested and
supported as deemed necessary.
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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.
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Minneapolis, Minnesota
May 2 1, 1974
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