belmont country club€¦ · 30/06/2014 · nature of business - belmont country club (the...

BELMONT COUNTRY CLUB

Report on Review of Financial Statements Years Ended June 30, 2014 and 2013


TABLE OF CONTENTS

INDEPENDENT ACCOUNTANTS' REVIEW REPORT

FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2014 AND 2013:

Statements of Financial Position

Statements of Activities

Statements of Changes in Net Assets

Statements of Cash Flows

Notes to Financial Statements

SUPPLEMENTARY INFORMATION:

Independent Accountants' Review Report on Supp]ementary Information

Statements of Outside Business Activities

Statement of Activities by Deparhnent

Page

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3

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5

6-13

15

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17-20

JANZEN TAMBERI ~WONG ACCOUNTANCY CORPORATION

George A. Tamberl, CPA Curtis R. Wong, CPA Chris A. Ratzlaff, CPA

Irene St. Martin, CPA Bernadette C. Sowards, CPA Ruthann L. Cuthbertson. CPA Christine E. Taylor, CPA Deborah F. Wong, CPA Rachel L. Bean, CPA Scott J. Zulewskl, CPA Virginia Hansen, CPA Michelle Cucchiara, CPA

Alfred D. Janzen, CPA- RET Jay R. Weed, CPA-RET

7650 N. Palm Avenue Suite Number I 05 Fresno, CA 9371 t TEL. (559) 432-0300 FAX (559) 432-2841 E-mail: [email protected]

M0

EMBER P\MERf!Z·~N·: INSTITUTE Of CERTIFIED'; PUBLIC ACCOUNTANTS·

INDEPENDENT ACCOUNTANTS' REVIEW REPORT

To the Board of Directors Belmont Country Club Fresno, California

We have reviewed the accompanying statements of financial position of Belmont Country Club (the "Club''), a non-profit corporation, as of June 30, 2014 and 2013, and the related statements of activities, changes in net assets and cash flows for the years then ended. A review includes primarily applying analytical procedures to management's financial data and making inquiries of Club management. A review is substantialJy less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.

Our responsibility is to conduct the reviews in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America.

\/Z./~fht/, ~1tJ75 anzen, Tamberi & Wong

Accountancy Corporation

August 28, 2014


STATEMENTS OF FINANCIAL POSITION JUNE 30, 2014 AND 2013

ASSETS

CURRENT ASSETS: Cash Accounts receivable, net of allowance for doubtful accounts of $5,000 and $3,500 in 2014 and 2013, respectively

Other receivables Inventories Prepaid expenses Deferred income taxes

Total current assets

PROPERTY AND EQUIPMENT: Property and equipment Less accumulated depreciation

Total property and equipment, net

OTHER ASSETS: Deferred income taxes Loan fees; net of accumulated amortization of $14,283 and $11,562, respectively

Total other assets

TOTAL ASSETS

2014 2013

$ 227,865 $ 230,652

217,540 179,014 25,509 21,685 69,197 75,739 17,610 17,731

1,600 3,186

559,321 528,007

4,503,193 4,462,214 3,469,254 3,303,366

1,033,939 1,158,848

30,400 20,942

12,922 15,643

43,322 36,585

$1,636,582 $1,723,440

2014 2013

CURRENT LIABILITIES: Accounts payable $ 259,045 $ 204,557 Accrued expenses 118,055 97,667 Current portion of long-term debt 37,693 32,349 Current portion of capital ]ease obligations 6,026 Current portion lifelong members' deferred revenue 66,900 63,384 Other deferred revenue 132,114 123,576

Tota] current liabilities 613,807 527,559

LONG-TERM LIABILITIES: Long-term debt 1,313, 181 1,352,272 Lifelong members' deferred revenue 235,844 275,674

Total long-term liabilities 1,549,025 1,627,946

NET ASSETS: Unrestricted (526,250) (432,065)

TOTAL LIABILITIES AND NET ASSETS $1 ,636,582 $1,723,440

See independent accountants' review report and notes to financial statements.

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ST A TEMENTS OF ACTIVITIES YEARS ENDED JUNE 30, 2014 AND 2013

UNRESTRICTED REVENUE: Dues, assessments and transfer fees Food, bar and pro shop sales Other

Total unrestricted revenue

UNRESTRICTED COSTS AND EXPENSES: Cost of food, bar and pro shop sales Salaries and wages Other expenses Interest Depreciation

Total unrestricted costs and expenses

CHANGE IN NET ASSETS BEFORE INCOME TAXES

PROVISION FOR INCOME TAXES

CHANGE IN NET ASSETS

2014 2013

$1,116,626 $ 952,341 818,965 873,508 514,566 525,980

2,450,157 2,35 1,829

361 ,619 384,119 845,648 850,502

1,088,49 1 1,065,3 18 86,723 93,961

165,888 181,425

2,548,369 2,575,325

(98,212) (223,496)

4,027 24,128

$ (94,185) $ (199,368)

See independent accountants ' review report and notes to financial statements.

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STATEMENTS OF CHANGES IN NET ASSETS YEARS ENDED JUNE 30, 2014 AND 2013

Total

BALANCE, JUNE 30, 2012 $ (232,697)

Unrestricted revenue 2,351,829

Unrestricted costs and expenses (2,575,325)

Provision for income taxes 24,128

BALANCE, JUNE 30, 2013 (432,065)

Unrestricted revenue 2,450,157

Unrestricted costs and expenses (2,548,369)

Provision for income taxes 4,027

BALANCE, JUNE 30, 2014 $ {526,250)

Cumulative Excess of

Unrestricted Revenue Over

Memberships Expenses

$559,165 $ (791,862)

2,351,829

(2.575,325)

24,128

559, 165 (991,230)

2,450,157

(2,548,369)

4,027

$559,165 $ (1,085,415)

See independent accountants ' review report and notes to financial statements.

-4-


STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30, 2014 AND 2013

CASH FLOWS FROM OPERA TING ACTIVITIES: Change in net assets Adjustment to reconcile change in net assets to net cash provided by operating activities: Amortization Depreciation Changes in assets and liabilities: Increase in accounts receivable, net Increase in other receivables (Increase) decrease in inventories Decrease in prepaid expenses Increase in deferred income tax assets Increase in accounts payable Increase (decrease) in accrued expenses Increase (decrease) in lifelong members' deferred revenue Increase in other deferred revenue

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITTES: Acquisition of property and equipment

CASH FLOWS FROM FINANCING ACTIVITIES: Payments on long-term debt Principal payments on capital lease obligations

Net cash used in financing activities

NET DECREASE IN CASH

CASH AT BEGINNING OF YEAR

CASH AT END OF YEAR

CASH PAID DURING THE YEAR FOR: Interest Income taxes

2014 2013

$ (94, 185) $ (199,368)

2,721 2,721 165,888 181 ,425

(38,526) (27,663) (3,824) (19,783) 6,542 (5,791)

121 20,274 (7,872) (24, 128) 54,488 53,472 20,388 (22,511)

(36,314) 63,840 8,538 5,748

77,965 28,236

(40,979) (24, 119)

(33,747) (29,846) {6,026) {I 7,184)

(39,773) (47,030)

(2,787) (42,913)

230,652 273,565

$ 227,865 $ 230,652

$ 88,061 $ 93,961 $ 2,600 $

See independent accountants' review report and notes to financial statements.

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NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2014 AND 2013

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business - Belmont Country Club (the "Club") which was incorporated in 1956 is a nonprofit California corporation. The purpose of the Club is to promote the game of golf and other recreational activities for the pleasure of its members. At June 30, 2014 and 2013, membership in the Club by type is summarized as follows:

2014 2013

Regular 143 154 Lifelong 20 19 Corporate 24 26 Associate 4 6 Lifetime 3 4 Social 50 63 Honorary 3 2 Non-equity 18 12 Young professionals 38 27 Single golfer 52 38 Junior Club 16 15 Inactive 8 4

379 370

Method of Accounting - The Club's accounts are maintained on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Revenue and. related assets are recognized when earned, and expenses are recognized when the obligation is incurred.

Basis of Presentation - Accounting principles generaJly accepted in the United States of America require the Club to report information regarding its financial position and activities according to three classes of net assets: unrestricted, temporarily restricted and permanently restricted.

Statement of Cash Flows - For purposes of reporting cash flows, short-term investments with maturities of three months or less at the date of acquisition are considered cash equivalents.

Accounts Receivable - The Club provides credit, in the normal course of business, to its members and customers. The Club does not require collateral to secure its accounts receivable. The Club does not charge interest, but it does charge a $20 fee each month for member balances that are not paid on a timely basis. The allowance for doubtful accounts is based on management's evaluation of outstanding accounts receivable at the end of the year. Management determines whether or not accounts are delinquent based on how recently payments have been received and

See independent accountants' review report.

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NOTES TO FINANCIAL STATEMENTS (Continued) YEARS ENDED JUNE 30, 2014 AND 2013

other known factors about the individual account holder. Management charges-off accounts receivable through bad debt expense and records any account recoveries with an off-set to bad debt expense. The direct charge-off method provides results similar to the reserve method in an material respects. Bad debt expense charged to operations in 201 4 and 2013 was $5,020 and $1,036, respectively.

Inventories - Inventories are valued at the lower of cost or market detennined by the first-in, firstout method. Inventories consist of food, bar and pro shop items.

Property and Equipment - Property and equipment are stated at cost if purchased and fair value if donated. Depreciation is computed using the straight~line method over the estimated useful lives of the assets, ranging from 3 to 40 years. Expenditures for maintenance and repairs are charged to expense as incurred. Major expenditures which extend the useful life of the property and equipment are capitalized.

Loan Fees - Loan fees and closing costs are amortized over the term of the related loan using the straight-line method.

Members/tip Dues and Charges - Membership dues and charges are recognized as revenue in the applicable membership period. Any unearned amounts are included in deferred revenue at the end of each accounting period. In 2011 , the Club updated its bylaws to add a lifelong membership category, which allows a maximum of 20 members to pay $25,000 or $30,000 in advance for a permanent, non-transferable membership. The Club amo1iizes these dues at the rate of the current monthly regular dues when the lifelong membership is paid, which was $293 and $278 in 2014 and 2013, respectively.

Income Taxes - The Club is a membership organization with tax-exempt status under Internal Revenue Code Section 50l(c)(7) and California Revenue and Taxation Code Section 2370l(g). The Internal Revenue Code specifies that non-member usage of the Club's facilities cannot exceed 15% of the Club's gross revenue in order to maintain its tax-exempt status.

Accounting of Taxes Assessed - Taxes assessed by various government authorities on various revenue-producing Club transactions (such as sales tax) are presented on the income statement on a net basis. As such, taxes assessed and collected by the Club are excluded from sales revenue.

Advertising Costs - The Club expenses non-direct response advertising costs as incurred and included such costs in other expenses.


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Fair Value of Financial Instruments - Accounting principles generally accepted in the United States of America define fair value, establish a framework for measuring fair value, establish a fair value hierarchy based on the quality of inputs used to measure fair value and enhance disclosure requirements for fair value measurements. The Club accounts for a significant portion of its financial instruments at fair value or considers fair value in their measurements. Assets and liabilities, including cash, accounts receivable, other receivables, inventories, prepaid expenses, loan fees, accounts payable, accrued expenses and deferred revenues, are carried at amounts which approximate fair value. The carrying value of long-term debt and capital lease obligations, including the current portion, approximates fair value, based on current borrowing rates for loans with similar maturities.

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. Management relies on historical experience and on other assumptions believed to be reasonable under the circumstances in making its judgment and estimates. Actual results could differ from those estimates.

Subsequent Events - Subsequent events have been evaluated through August 28, 2014, which is the date the financial statements were available to be issued .

2. CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Club to concentrations of credit risk consist primarily of cash equivalents and trade receivables.

The Club had no concentrations of credit risk at June 30, 2014 and 2013 due to not having cash deposits in one financial institution exceeding the federally insured limited amount of $250,000.

Most of the Club's business activity is with members arising within the County of Fresno, California. As of June 30; 2014 and 2013, the Club's receivables from members were as follows:

2014 2013

Accounts receivable $222,540 $182,514


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3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

Land Buildings and golf course Irrigation and lawn equipment Clubhouse equipment Golf carts Office equipment

Less accumulated depreciation

2014 2013

$ 106,033 2,745,559 1,416,744

168,726 14,845 51,286

4,503,193 3,469,254

$ 106,033 2,738,834 1,394,990

166,226 4,845

51,286 4,462,214 3,303,366

$1,033,939 $1,158,848

The Club purchased 36 used golfcarts in August 2014. The Club made a deposit of$10,000 on this purchase in 2014, which is included in the golf carts category of property and equipment.

4. LONG-TERMDEBT

Long-tenn debt consists of the following at June 30:

Note payable, Westamerica Bank, payable in monthly installments of $9,81 I.OS, including interest of 6.0% dated February 25, 2009, collateralized by a deed of trust on real property with a depreciated book value of $982,865; remaining principal due March I, 2019.

Less current portion


-9~

2014 2013

$1,350,874 $ 1,384,621

37,693 32,349

$1,313,181 $1,352,272



The following is a schedule of future maturities oflong-term debt as ofJune 30, 2014:

2015 2016 2017 2018 2019

5. CAPITAL LEASE OBLIGATIONS

$ 37,~93 40,018 42,486 45,107

1,185,570

$1,350,874

The Club entered into a capital lease, which included a bargain purchase option at the end of the lease term, for machinery and equipment in October 2008. The capital lease obligations have been recorded in the accompanying financial statements at the fair value of the equipment leased, including applicable sales tax. The capitalized cost of this equipment at June 30, 2014 and 2013 was $75,688 and related accumulated depreciation on this equipment at June 30, 2014 and 2013 was $62, 173 and $51 ,360, respectively. Total amortization expense for the equipment for the years ended June 30, 2014 and 2013 was $10,813, which was included in depreciation expense. The final lease payment was made in October 2013, thus the Club now owns the equipment.

6. OPERATING LEASES

The Club entered into an operating lease for golf carts in April 2009. The Club traded in its golf cart fleet for a reduction of rent over the lease term for a value of $76,800, which was considered prepaid rent and was expensed on a straight-line basis over the lease term. The lease terminated in March 2013, and the Club continues to lease the golf carts on a month-to-month basis. Total rent expense charged to operations in 2014 and 2013 related to this lease was $28,908 and $44,929, respectively. The Club purchased (see Note 3) and leased new golf carts in 2015. The old golf carts wil1 be returned to the leasing company when the new ca1ts arrive.

The Club entered into an operating lease for machinery and equipment in September 2008. The lease tenn ended in September 2012 and the machinery and equipment was returned. Total rent expense charged to operations in 2013 related to this lease was $9,372.

The Club entered into an operating lease for a copier and finisher in April 2011 . Total rent expense charged to operations in 2014 and 2013 related to this lease was $1,444.

The Club entered into an operating lease for machinery and equipment in October 2012. Total rent charged to operations in 2014 and 2013 related to this lease was $42,647 and $25,049, respectively. Prepaid rent of $3,536 related to this operating lease is included in prepaid expense for the years ended June 30, 2014 and 2013.

The Club entered into an operating lease for golf carts in July 2014. The lease term is for four years with monthly payments of $3,000. No rent was charged to operations in 20 I 4.

See independent accountants' review repo1t.

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NOTES TO FINANCIAL STATEMENTS (Continued) YEARS ENDED JUNE 30, 2014AND 2013

Future mm1mum lease payments, including applicable sales taxes, under all non-cancellable operating leases are as follows:

Year ending June 30, 2015 2016 2017 2018

Total

7. INCOME TAXES

$ 79,970 79,970 53,831 36,000

$249,771

The Club is taxed on unrelated business income, which consists primarily of revenue received from non-member activities offset by related expenses. The Club generated income from non-member activities of $40,650 and $68,585 during the years ended June 30, 2014 and 2013, respectively. The income amount was reduced by a $I ,000 specific deduction allowed by federal tax law in both years, which results in taxable income of $39,650 and $67,585 for the years ended June 30, 2014 and 2013, respectively. The Club was subject to a 15% federal tax rate, which resulted in federal taxes of $5,948 and $6,519 for the years ended June 30, 2014 and 2013, respectively. The federal taxes were offset by a $5,948 and $6,519 canyforward for each respective year related to Internal Revenue Code ("IRC") Section 458 for employer-paid Social Security and Medicare taxes on certain employee cash tips. Thus, there were no federal taxes due in either year. There were no state taxes generated in 2013 due to the application of a $67,585 small business loss carryforward for that year. There were state taxes of $3,845 generated in 2014. The effective federal tax rates for 2014 and 2013 were 0%. The effective state tax rates for 2014 and 2013 were 8.84% and 0%, respectively.

The Club has carryforward non-refundable credits related to IRC Section 458 for employer-paid Social Security and Medicare taxes on ce11ain employee cash tips. These credits are available to offset future federal taxable unrelated business income as follows:

Available until year ending June 30, 2027 2028 2029 2030 2031 2032 2033 2034

Total


- I I -

$ 1,043 5,685 7,140 6,269 3,657 3,280 2,772 3,084

$ 32,930



The realization of the benefit of these credits is dependent on future unrelated business taxable income. The Club's management has ascertained that continued future unrelated business taxable income is likely. Therefore, the Club has recorded a deferred tax asset related to these credits in 2014 and 2013, utilizing statutory tax rates of 15% for federal taxes and 8.84% for state taxes.

The components of income tax benefit are as follows:

Current tax expense: State

Deferred tax benefit: Federal State

Provision for income taxes

The components of the defen·ed tax assets consist of the following:

Deferred tax assets: IRC Section 458 credit carryforward

Balance sheet classification: Deferred tax assets, short-term Deferred tax assets, long-term

Deferred tax assets: IRC Section 458 credit carryforward Small business loss carryforward

Balance sheet classification: Deferred tax assets, short-term Deferred tax assets, long-term

Federal

$ 32,000

$ 1,600 $ 30,400

Federal

$ 22,000

$ 22,000

$ 1,058 $ 20,942

2014 2013

$ 3,845 $ ---

(7 ,872) (22,000) (2,128)

$( 4,027) $(24, 128)

2014 State Total

$ - $ 32,000

$ - $ l,600 $ - $ 30,400

2013 State Total

$ - $ 22,000 2,128 2,128

$ 2,128 $ 24,128

$ 2,128 $ 3,186

$ - $ 20,942

The Club's federal and state tax returns remain subject to audit for the preceding three years.


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BELMONT. COUNTRY CLUB


8. LITIGATION AND CONTINGENCIES

The Club believes it is in compliance with all environmental laws and regulations and that there are no other liabilities, litigations or claims that would materially affect the financial position or operations at this time.

* * * * * *


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SUPPLEMENTARY INFORMATION

INDEPENDENT ACCOUNTANTS' REVIEW REPORT ON SUPPLEMENTARY INFORMATION

To the Board of Directors Belmont Country Club Fresno, California

Our report on our reviews of the basic financial statements of Belmont Country Club for the years ended June 30, 2014 and 2013 appears on page 1. Those reviews were made primarily for the purpose of expressing a conclusion that there are no material modifications that should be made to the financial statements in order for them to be in confonnity with accounting principles generally accepted in the United States of America. The supplementary information included in the accompanying statements of outside business activities and activities by department are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the inquiry and analytical procedures applied in the reviews of the basic financial statements, and we did not become aware of any material modifications that should be made to such infonnation.

~~ftJ~ ~~zen, Tamberi & Wong f\.ccountancy Corporation

August 28~ 2014


STATEMENTS OF OUTSIDE BUSINESS ACTIVITIES YEARS ENDED JUNE 30, 2014 AND 2013

REVENUE: Cart rentals Green fees Clubhouse Other

Total revenue

DIRECT COSTS AND EXPENSES: Clubhouse Salaries and wages

Total direct costs and expenses

GROSS PROFIT BEFORE ALLOCATED EXPENSES

ALLOCATED EXPENSES: Golf course Clubhouse Pro shop

Total allocated expenses

CHANGE IN NET ASSETS BEFORE INCOME TAXES

PROVISION FOR INCOME TAXES

CHANGE IN NET ASSETS

2014

$ 32,190 78,589

148, 73 I 8,014

267,524

40,565 80,102

120,667

146,857

40,383 58,327 11,524

110,234

36,623

4,027

$ 402650

See independent accountants' review report on supplementary information.

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2013

$ 38,258 85,880

203,906

328,044

57,061 87,702

144,763

183,281

53,639 69,335 15,850

138,824

44,457

24,128

$ 68,585


STATEMENT OF ACTIVITIES BY DEPARTMENT YEAR ENDED JUNE 30 2014

Golf Pro Club O/S Grand Course Shop Food Bar House Admin. Total Events Total

REVENUE: Dues and assessments $ 725,807 $ - $ - $ - $ 223,325 $ 167,494 $ 1, 116,626 $ - $ 1, 116,626 Tournament fees 48,874 48,874 48,874 Carts, clubs, range balls 244,912 244,912 32,190 277,102 Green fees 74,290 74,290 78,589 152,879 Food, bar and pro shop sales 113,407 300,537 256,290 670,234 148,731 818,965 Interest 86 86 86 Loss on disposal of property and equipment Other 2,364 2,252 21,401 1,594 27,61 I 8,014 35,625

Total revenue 851,335 360,571 300,537 256,290 244,726 169,174 2,182,633 267,524 2,450,157

COSTS AND EXPENSES: Cost of food, bar and pro shop sales 90,562 149,879 80,613 321,054 40,565 361,619 Salaries and wages 314,083 115,855 86,510 73,773 175,325 765,546 80,102 845,648 Payroll taxes 37,601 13,869 10,356 8,832 20,989 91 ,647 9,589 101,236 Equipment rental 44,533 28,908 4,855 1,633 79,929 79,929 Bank charges 28,958 28,958 28,958 Cart repair and maintenance 1,121 1,121 1,121 Repair and maintenance 25,960 236 9,164 7,815 7,463 7,491 58,129 7,913 66,042 Irrigation maintenance 24,698 24,698 24,698 Gas and oil 29,331 29,331 29,331 Seeds, plants, sand and fertil izer 114,310 114,310 11,228 125,538 Insurance 72,882 26,884 20,074 17,119 40,683 177,642 18,587 196,229 Supplies 19,420 6,025 5,009 4,271 4,078 38,803 4,459 43,262 Taxes and licenses 15,741 6,667 5,557 4,739 4,525 3,126 40,355 4,947 45,302 Telephone 4,151 l,758 1,465 1,249 1,193 825 10,641 1,304 11,945 Travel and promotion 798 107 599 1,504 1,504 Utilities 26,832 19,949 14,336 12,225 11,674 39,503 124,519 12,761 137,280 Laundry and uniforms 6,876 7,402 10,506 9,691 34,475 8,126 42,601 Range expense 4,075 4,075 4,075


- 17 -


STATEMENT OF.ACTIVITIES BY DEPARTMENT {continued) YEAR ENDED JUNE 30, 2014

Golf Pro Club 0 15 Grand Course Shop Food Bar House Adm in. Total Events Total

COSTS AND EXPENSES (continued): Janitorial 5,603 5,603 5,942 11,545 Office supplies 3,821 3,821 3,821 Contract labor 13,188 6,963 6,963 27,114 731 27,845 Snacks for members 3,035 3,035 3,035 Meals for Board members 37 37 37 Postage and freight 285 6,188 6,473 6,473 Dues and subscriptions 785 2,578 3,363 3,363 Legal and accounting 8,903 8,903 2,967 11,870 Data processing 7,721 7,721 7,721 Social events 4,311 4,311 2,576 6,887 Bad debt expense 3,263 1,004 753 5,020 5,020 Tournament expense 41,428 41,428 41,428 Printing 1,783 630 537 513 3,463 3,463 Education and training 1,670 30 1,700 1,700 Miscellaneous 1,986 1,655 l,412 5,052 932 11,037 1,474 12,511 Interest 57,142 1,830 25,245 2,506 86,723 86,723 Amortization 2,721 2,721 2,721 Depreciation 76,449 1,833 35,625 30,380 2,537 1,434 148,258 17,630 165,888

Total costs and expenses 936,201 330,279 357,729 259,619 76,921 356,719 2,317,468 230,901 2,548,369

CHANGE IN NET ASSETS BEFORE INCOME TAXES (84,866) 30,292 (57,1 92) (3,329) 167,805 (187,545) (134,835) 36,623 (98,212)

PROVISION FOR INCOivffi TAXES 4,027 4,027

INCREASE (DECREASE) IN NET ASSETS BEFORE INCOME TAXES $ (84,866) $ 30,292 $ (57, 192~ $ (3,329) $ 167,805 $ (187,545) $ (134,835~ $ 40,650 $ (94,185)

See independent accountants' review report on supplementary infonnation.

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STATEMENT OF ACTIVITIES BY DEPARTMENT YEAR ENDED JUNE 30, 2013

Golf Pro Club O/S Grand Course Shop Food Bar House Adm in. Total Events Total

REVENUE: Dues and assessments $ 619,022 $ - $ - $ - $ 190,468 $ 142,851 $ 952,341 $ - $ 952,341 Tournament fees 45,344 45,344 45,344 Carts, clubs, range balls 220,645 220,645 38,258 258,903 Green fees 83,414 83,414 85,880 169,294 Food, bar and pro shop sales 151,333 276,096 242,173 669,602 203,906 873,508 Interest 102 102 102 Loss on disposal of property and equipment Other 137 1,735 48,450 2,015 52,337 52,337

Total revenue 747!917 373,713 276,096 242,173 238,918 144,968 2,023,785 328,044 2,351,829

COSTS AND EXPENSES: Cost of food, bar and pro shop sales 110,030 134,656 82,372 327,058 57,061 384,119 Salaries and wages 329,477 133,653 74,323 65,191 160,156 762,800 87,702 850,502 Payroll taxes 35,341 14,336 7,972 6,993 17,179 81,821 9.407 91,228 Equipment rental 36,036 44,929 4,811 1,733 87,509 87,509 Bank charges 24,620 24,620 24,620 Cart repair and maintenance 738 738 738 Repair and maintenance 18,423 1,219 6,801 5,965 5,885 31,332 69,625 8,081 77,706 Irrigation maintenance 18,823 18,823 18,823 Gas and oil 33,977 33,977 33,977 Seeds, plants, sand and fertilizer 131,172 131,172 16,037 147,209 Insurance 65,513 26,576 14,778 12,963 31,845 151,675 17,439 169,114 Supplies 15,588 4,623 3,579 3,139 3,098 30,027 5,704 35,731 Taxes and licenses 15,507 7,749 5,724 5,021 4,953 3,003 41,957 6,801 48,758 Telephone 3,655 1,827 l,349 l,184 1,168 709 9,892 1,603 11,495 Travel and promotion 850 665 186 346 2,047 2,047 Utilities 26,537 21,593 11,903 10,440 10,301 37,343 118,117 14,142 132,259 Laundry and uniforms 5,972 11,078 9,569 8,812 35,431 11 .740 47,171 Range expense 208 208 208


- 19 -


STATEMENT OF ACTIVITIES BY DEPARTMENT (continued) YEAR ENDED JUNE 30, 2013

Golf Pro Club OIS Grand Course Shop Food Bar House Adm in. Total Events Total

COSTS AND EXPENSES (continued): Janitorial 3,975 3,975 5,457 9,432 Office supplies 2,890 2,890 2,890 Contract labor 7,156 7,156 14,312 13,279 27,591 Snacks for members 3,866 3,866 3,866 Meals for Board members 549 549 549 Postage and freight 673 3,915 4,588 4,588 Dues and subscriptions 860 3,723 4,583 2,476 7,059 Legal and accounting 7,429 7,429 7,429 Data processing 5,028 5,028 5,028 Social events 5,999 5,999 5,999 Bad debt expense 674 207 155 1,036 1,036 Advertising 260 260 260 Tournament expense 42,877 42,877 42,877 Printing 2,661 982 862 850 5,355 5,355 Education and training 630 139 769 769 Miscellaneous 1,020 754 661 5,549 396 8,380 896 9,276 Interest 61,911 1,983 27,352 2,715 93,961 93,961 Amortization 2,721 2,721 2,721 Depreciation 81,104 l,525 34,882 30,597 6,121 1,434 155,663 252762 1812425

Total costs and expenses 927,796 390,216 314,428 241,356 79,010 338,932 2,291,738 283,587 2,575,325

CHANGE IN NET ASSETS BEFORE INCOME TAXES (179,879) (16,503) (38,332) 817 159,908 (193,964) (267,953) 44,457 (223,496)

PROVISION FOR INCOME TAXES 24,128 24,128

CHANGE IN NET ASSETS $ (179,879) $ (16,503) $ (38,332) $ 817 $ 159,908 $ (193,964) $ (267,953/ $ 68,585 $ ~199,368~


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