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SAMPLE CONSTRUCTION COMPANY

FINANCIAL STATEMENT AND

SUPPLENTARY INFORMANTION

For the Year Ended

December 31, 2011

The financial statement, prepared by an independent Certified Public Accountant, is essential for bonding purposes. It should answer all of the surety’s questions regarding the financial health of the company, as well as disclose contingencies, guarantees, and other items that may not be reflected on the various statements. If the surety knows the CPA understands the construction industry, the financial statement will enhance the contractor’s bonding line due to the increased reliability of the information presented. The following is a financial statement prepared to maximize both bonding and banking lines.

TABLE OF CONTENTS

PAGES

Independent Accountant's Review Report on the Financial

Statements (The Representation of Management)..................1

Financial Statements

Balance Sheet................................................2

Statement of Operations and Retained Earnings................3

Statement of Cash Flows....................................4-5

Notes to the Financial Statements.........................6-16

Supplementary Data

Schedule 1-Summary of Construction Operations...............17

Schedule 2-Schedule of Completed Contracts..................18

Schedule 3-Schedule of Contracts in Process.................19

Schedule 4-Schedule of Revenues Earned......................20

Schedule 5-General and Administrative Expenses..............21

INDEPENDENT ACCOUNTANT’S REVIEW REPORT

The Shareholder and Board of Directors

of Sample Construction Company

Phoenix, Arizona

I have reviewed the accompanying balance sheet of Sample Construction

Company as of December 31, 2011 and the related statements of operations

and retained earnings and cash flows for the year then ended. A review

includes primarily applying analytical procedures to management’s

financial data and making inquiries of management. A review is

substantially less in scope than an audit, the objective of which is the

expression of an opinion regarding the financial statements as a whole.

Accordingly, I 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.

My responsibility is to conduct the review in accordance with Statements

on Standards for Accounting and Review Services issued by the American

Institute of Certified Public Accountants. Those standards require me

to perform procedures to obtain limited assurance that there are no

material modifications that should be made to the financial statements.

I believe that the results of my procedures provide a reasonable basis

for my report.

Based on my review, I am not aware of any material modifications that

should be made to the accompanying financial statements in order for

them to be in conformity with generally accepted accounting principles

generally accepted in the United States of America.

My review was made 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 conformity with accounting

principles generally accepted in the United States of America. The

information included in the accompanying Schedules 1 through 5 is

presented only for purposes of additional analysis and has been

subjected to the inquiry and analytical procedures applied in the review

of the basic financial statements, and I am not aware of any material

modifications that should be made to such data.

THESE FINANCIAL STATEMENTS HAVE BEEN PREPARED ONLY FOR EDUCATIONAL PURPOSES!!!

March 10, 2012

-1-


BALANCE SHEET

(See Independent Accountant's Review Report)

December 31, 2011

ASSETS

Current assets (Note 1)

Cash and cash equivalents (Notes 1 and 2) $ 385,000

Contracts receivable (Notes 1, 2 and 3) 1,540,000

Costs and estimated earnings in excess

of billings on uncompleted contracts

(Notes 1 and 4) 15,000

Salary advances due from employees 4,000

Note receivable, shareholder (Note 7) 5,000

Prepaid items 31,000

Total current assets $ 1,980,000

Property and equipment, net of accumulated

depreciation and amortization (Notes 1 and 5) $ 250,000

Other assets

Note receivable, shareholder (Note 7) $ 57,000

Total assets $ 2,287,000

The Notes to the Financial Statements are an integral part of this

Statement.

LIABILITIES

Current liabilities (Note 1)

Accounts payable, including retention of

$45,000 $ 450,000

Billings in excess of costs and estimated

earnings on uncompleted contracts

(Notes 1 and 4) 150,000

Current portion of long-term debt (Note 9) 75,000

Accrued liabilities

Insurance payable 40,000

Bonuses and payroll taxes payable 90,000

Sales tax payable 35,000

Deferred income taxes payable (Notes 1 and 8) 87,000

Total current liabilities $ 927,000

Long-term debt (Note 9)

Note payable $ 300,000

Less current portion above -75,000

Total long-term debt $ 225,000

Deferred income taxes (Notes 1 and 8) $ 25,000

Total liabilities $ 1,177,000

Commitments (Note 6) $ -

STOCKHOLDER’S EQUITY

Capital stock

Authorized 1,000,000 shares of common stock,

no par value, 9,804 shares issued, 4,804

shares outstanding $ 50,000

Additional paid-in capital 110,000

Retained earnings 950,000

Total stockholder’s equity $ 1,110,000

Total liabilities and stockholder's equity $ 2,287,000

-2-


STATEMENT OF OPERATIONS AND RETAINED EARNINGS

(See Independent Accountant’s Review Report)

For the Year Ended December 31, 2011

Contract revenues earned (Note 1) $ 11,000,000

Cost of revenues earned (Note 1) -9,300,000

Gross profit $ 1,700,000

General and administrative expenses (Note 1) -1,099,000

Income (-loss) from operations $ 601,000

Other income (-expense)

Interest income $ 20,000

Miscellaneous income 2,000

Interest expense -15,000

Total other income (-expense) $ 7,000

Net income (-loss) before (-provision) recovery

Income before income taxes $ 608,000

Provision for income taxes (Notes 1 and 8) -240,000

Net income (-loss) $ 368,000

Retained earnings, beginning of year 582,000

Retained earnings, end of year $ 950,000


statement.

-3-


STATEMENT OF CASH FLOWS



Cash flows provided by operating

activities

Cash received from customers $ 10,300,000

Cash paid to suppliers and

employees -10,068,000

Interest received 20,000

Miscellaneous income 2,000

Interest paid -15,000

Net cash provided by operating

activities $ 239,000

Cash flows used by investing

activities

Capital expenditures $ -93,000

Net cash used by investing

activities -93,000

Cash flows used by financing

activities

Principal payments on

long-term debt $ -80,000

Proceeds from note receivable 4,000

Net cash used by financing

activities -76,000

Net increase in cash and cash

equivalents $ 70,000

Cash and cash equivalents,

beginning of period 315,000

Cash and cash equivalents,

end of period $ 385,000


statement.

-4-


STATEMENT OF CASH FLOWS (CONTINUED)



Reconciliation of Net Income to Net Cash

Provided by operating activities

Net income (-loss) $ 368,000

Adjustments to reconcile net

income to net cash provided by

operating activities

Depreciation $ 65,000

Change in assets and liabilities

Increase in contracts receivable -90,000

Decrease in costs and estimated

earnings in excess of billings

on uncompleted contracts 20,000

Increase in prepaid items -13,000

Increase in employee advances -1,000

Decrease in accounts payable -235,000

Increase in billings in excess of

costs and estimated earnings on

on uncompleted contracts 70,000

Decrease in bonuses and payroll

taxes payable -15,000

Increase in sales tax payable 11,000

Decrease in insurance payable -3,000

Increase in deferred income

taxes payable 62,000

Total adjustments -129,000

Net cash provided by operating

activities $ 239,000


statement.

-5-


NOTES TO THE FINANCIAL STATEMENTS



Company formation and operating cycle.

Sample Construction Company is a corporation duly organized and

operating under the laws of the State of Arizona. The Corporation was

approved by the State of Arizona on March 6, 2008.

The length of the Company's contracts vary but is typically less than

one year. Therefore, assets and liabilities are classified as current

and non-current based on a one year operating cycle.

1. SIGNIFICANT ACCOUNTING POLICIES

Revenue and cost recognition. The accompanying financial statements are

prepared according to the percentage of completion method, and therefore

take into account the profit earned to date on contracts not yet

completed.

The amount considered as earned under this method is that portion of the

total contract price the contractor has a right to bill, based on that

portion of the contract work actually completed. It is not related to

the progress billings to customers. Completion percentage is measured

by the relationship of cost expended to anticipated final total cost,

based on current estimates of cost to complete the project.

Contract costs include all direct material and labor costs and those

indirect costs related to contract performance, such as indirect

insurance, miscellaneous expenses and depreciation costs. Provisions

for estimated losses on uncompleted contracts are made in the period in

which such losses are determined. Changes in job performance, job

conditions, and estimated profitability, including those arising from

contract penalty provisions, and final contract settlements may result

in revisions to costs and income and are recognized in the period in

which the revisions are determined.

The asset, "Costs and estimated earnings in excess of billings on

uncompleted contracts," represents revenues recognized in excess of

amounts billed. The liability, "Billings in excess of costs and

estimated earnings on uncompleted contracts," represents billings in

excess of revenues recognized.

Arizona, its counties and most of its cities impose a sales tax on the

Company’s sales when Sample Construction Company is acting in the

capacity of a prime contractor. The Company collects the sales tax from

its customers and remits the taxes to the applicable taxing authority.

The Company’s accounting policy is to include the sales tax collected

and remitted in both revenue and cost of revenues earned. For the year

December 31, 2011, the sales tax collected and reflected in cost of

revenues earned is $390,000.

-6-





1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Contract receivables. Contracts receivable represent the amounts billed

but uncollected on completed construction contracts and construction

contracts in process.

The Company uses the allowance method of recognizing uncollectible

accounts receivable. The allowance method recognizes bad debt expense

as a percentage of accounts receivable based on a review of the

individual accounts outstanding and the Company's prior history of

uncollectible accounts receivable. There was no change in the allowance

from the prior year. At December 31, 2011, there is no allowance for

bad debt established and in the opinion of management, all outstanding

receivables at December 31, 2011 are considered fully collectible.

There not any change in the valuation allowance from the prior year.

Property, equipment, and depreciation. Property and equipment are

recorded at cost. Maintenance and repairs are charged to operations

when incurred. Betterments and renewals are capitalized when incurred.

Depreciation for all major classes of depreciable assets is provided for

primarily on the straight-line method, taken over the useful lives of

the assets.

Income taxes. The Company is taxed for federal and state purposes under

the provisions of Subchapter C of the Internal Revenue Code.

For financial accounting purposes the Company reports income and

expenses based on the percentage-of-completion method of accounting for

long-term construction contracts. For tax accounting purposes the

Company reports income and expenses based on the completed contract

method of accounting for long-term construction contracts.

The Company recognizes deferred income taxes according to the provisions

of FASB Accounting Standards Codification 740-10-45-4 and 45-5. FASB

ASC 740 utilizes the liability method and deferred taxes are determined

based on the estimated future tax effects of differences between the

financial statement and tax bases of assets and liabilities given the

provisions of enacted tax laws.

The Company accounts for tax penalties and interest in the provision for

income taxes.

The Corporation adheres to accounting rules that prescribe when to

recognize and how to measure the financial statement effects, if any, of

income tax positions taken or expected to be taken on its income tax

returns, including the position that the Corporation continues to

qualify to be treated as a C Corporation for both federal and state

-7-





1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

income tax purposes. These rules require management to evaluate the

likelihood that, upon examination by relevant taxing jurisdictions,

those income tax positions would be sustained.

Based on that evaluation, if it were more than 50% probable that a

material amount of income tax would be imposed at the entity level upon

examination by the relevant taxing authorities, a liability would be

recognized in the accompanying balance sheet along with any interest and

penalties that would result from that assessment. Should any such

penalties and interest be incurred, the Corporation’s policy would be to

recognize them as operating expense.

Based on the results of management’s evaluation, adoption of the new

rules did not have a material effect on the Corporation’s financial

statements. Further, no interest or penalties have been accrued or

charged to expense as of December 31, 2011 or for the year then ended.

The Corporation’s income tax returns are subject to examination by

taxing authorities for a period of three years from the date they are

filed. As of December 31, 2011, the tax following tax years are subject

to examination:

Jurisdiction Open Years for Filed Returns Return to be filed in 2012

Federal December 31, 2008-2010 December 31, 2011

Arizona December 31, 2008-2010 December 31, 2011

General and administrative expenses. General and administrative

expenses are charged to expense as incurred.

Cash equivalents. For purposes of the statement of cash flows, the

Company considers all highly liquid debt instruments purchased with a

maturity of three months or less to be cash equivalents.

Compensated absences. Compensated absences have not been accrued

because the amount cannot be reasonably estimated.

Advertising costs. Advertising costs are charged to expense when

incurred. For the year ended December 31, 2011, there is not any

advertising expense.

2. CONCENTRATION OF CREDIT RISK

Company activities

Sample Construction Company is engaged in the construction industry as a

-8-





2. CONCENTRATION OF CREDIT RISK (CONTINUED)

general contractor, primarily on commercial projects in the greater

Phoenix, Arizona area. The work is performed under fixed-price

contracts. These contracts are undertaken by the Company without joint

ventures or partnerships.

Cash and Cash Equivalents

The Company maintains noninterest bearing cash balances in two financial

institutions with various locations. The Federal Deposit Insurance

Corporation provides for unlimited insurance coverage of noninterest-

bearing accounts through December 31, 2012. The noninterest bearing

accounts are separate from, and in addition to the insurance coverage

provided to a depositor's other deposit accounts.

The Company has other deposit accounts at a financial institution with

two different locations. The Federal Deposit Insurance Corporation

insures $250,000 of deposits at each location. At December 31, 2011,

the Company has uninsured cash in the aforesaid money markets accounts

in the approximate amount of $15,000.

Effective July 31, 2010, the Dodd-Frank Wall Street Reform and Consumer

Protection Act permanently raises the current standard maximum deposit

insurance amount to $250,000.

Major customers

During the year ended December 31, 2011, Sample Construction Company

recognized sales to three major customers that exceeded 10% of total net

sales. Sales to these customers were $3,750,000 (34.1%), $3,400,000

(30.9%) $2,900,000 (26.4%) of total net sales.

Contract receivables

It is the Company's policy to pre-lien all construction work performed.

Pre-liens enable a contractor to file a lien in the event the project

owner fails to live up to the provisions of the contract.

In general, a construction contractor has a number of days, defined by

statue, in which to file a lien in the event of non-payment of a

contract receivable. The contractor then has six months to foreclose on

the property. The foreclosure forces a sheriff's sale of the aforesaid

property. The bank or mortgage holder has first rights, up to the

mortgage amount, to any proceeds of the sale. Any proceeds in excess of

the mortgage is received by the contractor.

-9-





3. CONTRACT RECEIVABLES

Contract receivables

Completed contracts $ 270,000

Contracts in process 1,000,000

Unbilled receivables 20,000

Retention 250,000

Less allowance for doubtful accounts (Note 1) -

Total contract receivable $ 1,540,000

Unbilled receivables represent completed jobs for which a final billing

had not been submitted as of December 31, 2011.

Historically, the Company's uncollectible contracts receivable, after

direct write-offs, have been negligible. In the opinion of management,

all contract receivables outstanding at December 31, 2011, are

considered to be fully collectible, therefore at December 31, 2011, no

doubtful account is established. Bad debt expense at December 31, 2011

is $20,000.

As of December 31, 2011, there is not any contract receivables aged

greater than 90 days.

4. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

Costs incurred on uncompleted contracts $ 3,650,000

Estimated earnings 650,000

$ 4,300,000

Less: Billings to date -4,435,000

$ -135,000

Included in accompanying balance sheet

under the following captions:

Costs and estimated earnings in excess

of billings on uncompleted contracts $ 15,000

Billings in excess of costs and estimated

earnings on uncompleted contracts -150,000

$ -135,000

-10-





5. PROPERTY AND EQUIPMENT

Assets

Building and land $ 150,000

Furniture and fixtures 50,000

Vehicles 350,000

Construction equipment 150,000

$ 700,000

Accumulated depreciation and amortization

Building $ 30,000

Furniture and fixtures 40,000

Vehicles 260,000

Construction equipment 120,000

$ 450,000

Net property and equipment $ 250,000

Total depreciation expense for the year ended December 31, 2011 is

$65,000.

6. COMMITMENTS

Performance and payment bonds

The Company, as a condition for entering into certain construction

contracts, has outstanding surety bonds collateralized by contract

receivables.

7. RELATED PARTY TRANSACTIONS

Note receivable from related party

On September 3, 2003, the Company sold its building and land to the

Company’s sole shareholder. As part of the sale, the Company signed a

note receivable with it’s shareholder for $77,000. The note stipulates

principal and interest payments of $700 per month, with a balloon

payment, of approximately $20,000, due September, 2013. The note bears

interest at 7.00% per annum. The balance due at December 31, 2011 is

$62,000. At December 31, 2011, $5,000 of the receivable is reflected as

a current asset and the balance of $57,000 is recognized as a long-term

asset.

Office and land lease

-11-





7. RELATED PARTY TRANSACTIONS (CONTINUED)

The Company has a non-cancelable operating lease on the above land and

office facilities with Sample Holdings, LLC. Sample Holdings, LLC is

100% owned by the Company’s sole shareholder. The operating agreement

expires December 31, 2015. The base rent requires a monthly payment of

$4,000 including sales tax. Total rental expenses for year ended

December 31, 2011 is $48,000. The Company has an option to renew the

lease for an additional five years.

As of December 31, 2011, a schedule of future minimum lease payments

due under the non-cancelable operating lease agreements are as

follows:

Period Ending

December 31, Amount

2012 $ 48,000

2013 48,000

2014 48,000

2015 48,000

$ 192,000

There were no contingencies, minimum rentals or subleases during the

year ended December 31, 2011.

8. INCOME TAXES AND DEFERRED INCOME TAXES

For the year ended December 31, 2011 the provision of income taxes

include the following:

Current $ 178,000

Provision for deferred income taxes 62,000

$ 240,000

Deferred taxes are determined based on the estimated future tax effects

of differences between the financial statement and tax bases of assets

and liabilities given the provisions of the enacted tax laws. However,

some temporary differences cannot be identified with a particular asset

or liability, such as differences between percentage-of-completion and

completed contract methods for income recognition on long-term

contracts. As of December 31, 2011, the net deferred tax liability is

comprised of the following:

-12-





8. INCOME TAXES AND DEFERRED INCOME TAXES (CONTINUED)

Federal State Total

Current deferred taxes

Gross liabilities $ 70,000 $ 17,000 $ 87,000

Non-current deferred taxes

Gross liabilities $ 19,000 $ 6,000 $ 25,000

Total deferred taxes $ 89,000 $ 23,000 $ 112,000

The tax effect of significant temporary differences representing

deferred tax assets and liabilities are as follows:

Long-term contracts (cumulative

financial statement revenue

greater than tax basis revenue,

resulting in a current deferred

tax liability) $ 87,000

Depreciation (financial statement

net book value greater than tax

basis net book value, resulting in

a long-term deferred tax liability $ 25,000

Total deferred tax liabilities $ 112,000

For the year ended December 31, 2011, the Company's effective income tax

rate is higher than what would be expected if the federal statutory rate

were applied to income from continuing operations, primarily due to

state taxes, net of federal income tax benefit.

9. LONG-TERM DEBT

At December 31, 2011, long-term consist of the following:

Note payable to finance company, collateralized by

a vehicle, principal and interest due in monthly

installments of $1,200. The note bears interest at

5.000 percent and is due in full by July, 2012. $ 20,000

Note payable to finance company, collateralized by

equipment, principal and interest due in monthly

installments of $1,800. The note bears interest at

5.500 percent and is due in full by December, 2014. 80,000

Note payable to finance company, collateralized

-13-





9. LONG-TERM DEBT (CONTINUED)

Vehicles, principal payments due in monthly

installments of $5,000, plus interest on the

unpaid balance at the rate of 7.75% per annum,

also payable monthly. The note is due in full

February, 2014. 200,000

Total $ 300,000

Less current portion -75,000

Total long-term debt $ 225,000

A schedule of future minimum principal payments due on long-term debt

outstanding at December 31, 2011, is as follows:

Year ending December 31,

2012 $ 75,000

2013 175,000

2014 50,000

Thereafter -

$ 300,000

The Company has a $400,000 line of credit commitment from XYZ Bank.

Borrowings under the line are secured by contract receivables, property,

plant and equipment and the shareholder’s personal assets. The line

accrues interest at the bank’s prime rate plus two percent. The prime

rate at December 31, 2011 is 3.25%. There is not a balance outstanding

under the line at December 31, 2011.

The Company shall timely perform and observe the following financial

covenants:

a. A minimum tangible net worth of $600,000.

b. A maximum ratio of total liabilities to tangible net worth of 2.50

to 1.

c. A minimum debt service coverage of 1.00: 1.

10. FINANCIAL INSTRUMENTS

The Companies financial assets are contract receivables, costs and

estimated earnings in excess of billings on uncompleted contract,

employee advances, note receivable, shareholder and pre-paid items. The

-14-





10. FINANCIAL INSTRUMENTS (CONTINUED)

Company’s financial liabilities are trade payables, billings in excess

of costs and estimated earnings on uncompleted contracts accrued

liabilities and fixed rate loans. It is management’s opinion that the

Company is not exposed to significant interest rate risk or credit risk

arising from any of the aforementioned instruments (long-term assets

and debt's interest rate is fixed and reflect market rates). Unless

otherwise noted the fair values of these financial instruments are

deemed by management to approximate their carrying values.

11. STATEMENT OF CASH FLOW

Non-Cash Investing and Financing Activity

During the year ended December 31, 2011, the Company did not have any

non-cash investing and financing activities that affected assets and

liabilities:

12. ESTIMATES

The preparation of financial statements in conformity with generally

accepted accounting principles requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the date of the

financial statements and the reported amounts of revenues and expenses

during the reporting period. Actual results could differ from those

estimates.

The amount considered earned under the percentage of completion method

on fixed price contracts is measured by the relationship of cost

expended to anticipated final total cost, based on current estimates of

cost to complete the project(s). That method is used because management

considers total cost to be the best available measure of progress on the

contracts. Because of the inherent uncertainties in estimating costs,

it is reasonably possible that the Company's recorded estimate of cost

to complete the project(s) may change in the near term.

13. BACKLOG

The following schedule shows a reconciliation of backlog representing

signed contracts in existence at December 31, 2011:

Balance, December 31, 2010 $ 1,295,000

New contracts, 2010 10,705,000

$ 12,000,000

Less current revenue earned, 2011 -11,000,000

-15-





13. BACKLOG (CONTINUED)

Balance, December 31, 2011 $ 1,000,000

In addition, between January 1, 2012 and March 10, 2012, the Company

enter into additional construction contracts in the amount of $7,800,00.

14. SUBSEQUENT EVENT CUT-OFF DATE

Management considered March 10, 2012 as the cut-off date regarding

consideration of subsequent events analysis and disclosure. The date is

the date the financial statements were available for issuance.

-16-


SCHEDULE 1-SCHEDULE OF CONSTRUCTION OPERATIONS



Revenues Cost of GrossEarned Construction Profit

Contracts completed during the year

Total revenue, costs & gross profit 11,200,000$ 9,600,000$ 1,600,000$

Reflected in prior years -3,000,000 -2,550,000 -450,000

Recognized during current year 8,200,000$ 7,050,000$ 1,150,000$

Contracts in process at year end

Total revenue, costs & gross profit 4,300,000$ 3,650,000$ 650,000$

Reflected in prior years -1,500,000 -1,400,000 -100,000

Recognized during current year 2,800,000$ 2,250,000$ 550,000$

Totals 11,000,000$ 9,300,000$ 1,700,000$

-17-


SCHEDULE 2-SCHEDULE OF COMPLETED CONTRACTS



Job

No. Job Description

Adjusted

Contract Price

Cost of

Construction

Gross Profit

(Loss)

Gross Profit

(Loss)

In Prior Period

Current Gross

Profit (Loss)

Earned

Gross

Profit

(Loss)

Percent

113 Chandler Office 1,700,000$ 1,440,000$ 260,000$ 180,000$ 80,000$ 15.3%

115 Central Apts. 1,800,000 1,500,000 300,000 190,000 110,000 16.7

118 Rancho Market 1,400,000 1,220,000 180,000 80,000 100,000 12.9

119 Bell Towers 2,900,000 2,480,000 420,000 - 420,000 14.5

120 Strip Center 3,400,000 2,960,000 440,000 - 440,000 12.9

11,200,000$ 9,600,000$ 1,600,000$ 450,000$ 1,150,000$

-18-


SCHEDULE 3-SCHEDULE OF CONTRACTS IN PROCESS



Job

No. Job Name

Adjusted

Contract Price Amount Billed

Revenues

Earned

Cost of

Construction

Gross Profit

(Loss)

Gross Profit

(Loss) in Prior

Period

121 Phoenix Office 1,550,000$ 1,290,000$ 1,305,000$ 1,105,000$ 200,000$ 100,000$

122 Medical Center 3,750,000 3,145,000 2,995,000 2,545,000 450,000 -

Totals 5,300,000$ 4,435,000$ 4,300,000$ 3,650,000$ 650,000$ 100,000$

Job to Date

Current Gross

Profit (Loss)

Earned

Under-Billed

(Over-Billed)

Percent

Done

Work Load

Remaining

Cost to

Complete

Future Gross

Profit (Loss)

Final Estimated

Gross Profit

(Loss) G.P. %

100,000$ 15,000$ 84.2% 245,000$ 207,000$ 38,000$ 238,000$ 15.4%

450,000 (150,000) 79.9% 755,000 640,000 115,000 565,000 15.1%

15,000

550,000$ -150,000$ 1,000,000$ 847,000$ 153,000$ 803,000$

Management Estimates

-19-


SCHEDULE 4-SCHEDULE OF COST OF REVENUES EARNED



COST CATEGORY DOLLAR AMOUNT

Direct Cost:

Labor and overhead $ 400,000

Material 800,000

Subcontractors 6,800,000

Equipment rentals 100,000

Other direct cost 455,000

Total direct cost $ 8,555,000

Indirect cost:

Superintendents $ 250,000

Fringe benefits 30,000

Vehicle expense 60,000

Depreciation 25,000

Insurance 200,000

Repairs and maintenance 40,000

Travel 115,000

Small tools and supplies 25,000

Total indirect cost $ 745,000

TOTAL COST $ 9,300,000

-20-


SCHEDULE 5-SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES



Amount

Advertising and promotion $ 4,100

Bad debt expense 20,000

Contributions 8,700

Common area expense 2,500

Depreciation 40,000

Dues and subscriptions 18,000

Employee goodwill 10,000

Entertainment and meals 4,900

Insurance 24,000

Licenses and taxes 5,700

Miscellaneous expense 2,600

Office expenses 36,000

Office salaries 116,000

Officer's salary 636,500

Payroll taxes 43,000

Professional fees 28,000

Rent expense 48,000

Repairs and maintenance 6,000

Telephone and utilities 19,000

Travel expense 3,000

Vehicle expense 23,000

$ 1,099,000

-21-

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