Page 261 - Aida Hovsepian Onboarding

PANCAKE SUPPLY CHAIN CO-OP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2016 and 2015

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Subsequent Events: Management has performed an analysis of the activities and transactions subsequent
to December 31, 2017 to determine the need for any adjustments to and disclosures within the financial
statements for the period ended December 31, 2017. Management has performed their analysis through
March 27, 2018, the date the financial statements were available to be issued.

NOTE 2 - INVESTMENT 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, 2017 and 2016:

2017 2016

Current assets $ 5,544,844 $ 6,728,321
Computers, equipment and leasehold improvements, net 43,568 54,304

$ 5,588,412 $ 6,782,625

Current liabilities $ 3,448,523 $ 3,692,377
Members’ equity 2,139,889 3,090,248

$ 5,588,412 $ 6,782,625

Net revenues $ 13,841,607 $ 14,967,035

Net earnings $ 3,448,475 $ 5,046,684

Centralized Supply Chain Services, LLC has a $1,000,000 line of credit with its primary bank. Pancake
Supply Chain Co-op and Apple Supply Chain Co-op are Guarantors of this line of credit. For the years
ended December 31, 2017 and 2016, there were no borrowings on the line of credit.

NOTE 3 - INCOME TAXES

The provision for income taxes for the year ended December 31, 2017 and 2016 consists of the following:

2017 2016
Current
Federal $ 1,941 $ 1,600
State 1,485 1,430

$ 3,426 $ 3,030

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

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