Page 67 - PC Tax RFP

THE PERRYCOMPANY OF 7TH AVENUE, INC. NOTES TO REVIEWED FINANCIAL STATEMENTS DECEMBER 31, 2015
THE COMPANY AND ITS OPERATIONS
The Business
THE PERRY COMPANY
NOTE 1:
NOTE 2:
The Perry Company of 7th Avenue Inc. (“Company”) was originally incorporated on December 02, 2010 as a Florida corporation. The Company’s principal executive offices are located at Tampa, Florida. The Company is engaged in the construction of industrial and commercial buildings mostly in the Tampa Bay region of Florida in the United States. The work is performed mostly under fixed-price contracts. The length of the Company’s contracts varies, but is typically less than one year, there was one large contract that has spanned a period longer than one year.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, cash and cash equivalents include demand deposits, time deposits, certificates of deposits, and the Company also considers all highly liquid assets purchased with an initial maturity of three months or less to be cash equivalents.
Property and Equipment
Property and Equipment are recorded at cost less accumulated depreciation. Depreciation for financial statement purposes is computed using the straight-line method over the estimated useful lives of the individual assets. Estimated useful lives of property and equipment are as follows:
Office Equipment
Furniture and Fixtures
Computer Equipment and Accessories
7 Years 7 Years 5 Years
Maintenance, repairs, and small tools are expensed as incurred. Major renewals and improvements are capitalized. Upon sale or retirement, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in operations.
Revenue and Cost Recognition
Revenues from fixed-price and modified fixed-price contracts are recognized on the percentage-of-completion accounting method over the life of the contract. Percentage-of- completion is determined on the basis of costs incurred, projected costs to complete and other applicable measures of partial performance such as completion of various segments specified on the contracts. Such amounts necessarily are based on estimates, and the uncertainty inherent in the estimates initially is reduced progressively as work on the contract nears completion. If estimated total costs for a contract indicate a loss, the Company provides currently for the total anticipated loss on the contract in the period that they are determined.
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