ACCT 551 Course Project
Notes to Financial Statements
Table of Contents
I. Cover Page 1 II. Table of Contents Page 2 III. Tropical Pool Cleaning Income Statement Page 3 IV. Tropical Pool Cleaning Balance Sheet Page 4 V. Notes to Financial Statements Page 5 VI. Reference Page 9
Notes to Consolidated Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Nature of Operations
Tropical Pool Cleaning Corporation (henceforth refer to as the “Company,” “we” or “us”) provides pool cleaning, maintenance and repair services to individuals and corporations nationwide. Our headquarters are in New York City however we maintain a significant presence in Florida, California and Texas.
2. Accounting Principles and Presentation
The Consolidated Financial Statements have been prepared in agreement with the United States of America GAAP regulations.
3. Use of Estimates
In the preparation of financial statements estimates by managers are sometimes necessary. These assumptions are made using available data pertaining to the company’s assets, liabilities, revenue and expenses. Other areas where estimation may occur are future tax liability projections, fair value estimation and impairment calculation on investments.
4. Revenue Recognition
Revenue is recognized when a service contract is signed, service is rendered, or evidence of an arrangement exists and collectability is probable. Revenues indicated are net of taxes collected for federal and state purposes and thus surrendered to the corresponding agency. Certain agreements span various years or seasons thus their revenue is recorded as unearned service revenue and is recognized over the terms of the service contract. Revenue from consultations is recognized as the service is preformed and is generally based on a predetermined hourly rate.