Page 44 - 2018 Apple Annual Report

APPLE SUPPLY CHAIN CO-OP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2018 and 2017

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Subsequent Events: Management has performed an analysis of the activities and transactions subsequent
to December 31, 2018 to determine the need for any adjustments to and disclosures within the financial
statements for the period ended December 31, 2018. Management has performed its analysis through
March 20, 2019, the date the financial statements were available to be issued.

NOTE 2 - INVESTMENTS AT EQUITY

The Co-op has a 50% investment in Centralized Supply Chain Services, LLC, which is carried at cost,
adjusted for the Co-op’s proportionate share of its earnings and losses, which are allocated to the Co-op
based upon the Co-op’s proportionate share of activity conducted by Centralized Supply Chain Services,
LLC.

Following is a summary of financial position and results of operations of Centralized Supply Chain Services,
LLC for the years ended December 31, 2018 and 2017:

2018 2017

Current assets $ 5,263,125 $ 5,544,844
Computers and equipment, net 30,352 43,568

$ 5,293,477 $ 5,588,412
Current liabilities $ 3,481,444 $ 3,448,523
Members’ equity 1,812,033 2,139,889

$ 5,293,477 $ 5,588,412

Net revenues $ 13,828,738 $ 13,841,607
Net earnings $ 2,632,352 $ 3,448,475

Centralized Supply Chain Services, LLC has a $1,000,000 line of credit with its primary bank. Apple Supply
Chain Co-op and Pancake Supply Chain Co-op are Guarantors of this line of credit. For the years ended
December 31, 2018 and 2017, there were no borrowings on the line of credit.

NOTE 3 - INCOME TAXES

The provision for income taxes for the year ended December 31, 2018 and 2017 consists of the following:

2018 2017
Current
Federal $ 16,100 $ 900
State 5,937 1,177

$ 22,037 $ 2,077

Effective rates vary from expected marginal rates due to the deductibility of patronage dividend.

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