HomeMy WebLinkAbout; ; 1954-55 Audit Report; 1955-02-161-^3. EVERTS, C. P. A. 11816 19461 MEMBERS
CARLM^ESENOFF C.P A AMERICAN (NSTTTUTE OF ACCOUNTANTS
ALBERT M.HUDSON. C.P.A. CAUFORNIASOC.ETr OF
JOHN 7. SWAN, C.P. A. CERTIFIED PUBLIC ACCOUNTANTS
HAMILTON MOODY.C.P A- _ _ TELEmONE BELMONT 46101CHARLESCPORTER.C PA EVERTS AND ESENOFF
K...R.TI K.r-rn-r r , . OIHBROmciJHERBERT L. BECKETT, C. PA. CERTIFIED PUBLIC ACCOUNTANTS EL CAJON, CALIFORNIA
CHARLES W.LAMDEN.C.P.A. OC1ANSIDE, CAUFORN,A
ROY M . HERAMB. C. P. A . SUITE 727. FIRST NATIONAL BUILDING
SAN DIEGO i,CALIFORNIA
February 16, 1955
Mr. E. 0. Hagen, President
Board of Directors
Carlsbad Mutual Water Company
Carlsbad, California
Dear Sir:
We have examined the financial records of the Carlsbad Mutual
Water Company, and have prepared the attached statement of financial
position at December 31, 1954, and related statement of operations and
margins for the year then ended. Cur examination was made in accord-
ance with generally accepted auditing standards, and accordingly in-
cluded such tests of the accounting records and such other auditing
procedures as we considered necessary in the circumstances.
In our opinion, the accompanying statement of financial position
and statement of operations and margins present fairly the financial
position of the Carlsbad Mutual Water Company at December 31, 1954, and
the results of its operations for the year then ended, in conformity
with generally accepted accounting principles applied on a basis con-
sistent with that of the previous year, except the following changes
in policy and procedures which we approve:
(1) Consumer meters and services have been revalued to
agree with current replacement costs.
(2) Depreciation has not been recorded on consumer meters
and services.
(3) The cost of replacing consumer meters and services has
been charged to maintenance expense.
Yours very truly,
For EvertS and Esenoff
Certified Public Accountants
COMMENTS RESPECTING OPERATIONS AND MARGINS
The statement of operations and margins is presented on
Following is a brief comparative statement of operations and
the years 1954 and 1953:
Quantity of water billed to
shareholder water users
(acre feet)
CREDITS:
Shareholder water users' water
purchases, transfer charges,
commissions, etc.
CHARGES:
Water production and purifi-
cation
Water transmission and
distribution
Power
General expense
Administrative
Debt service expense
Water conservation,
development, etc.
Total charges before
depreciation and credit
for overhead applied
Add depreciation on utility
plant and equipment
Deduct overhead applied
to Jobs
Net charges
Net margin (loss)
on operations
Year 1954 Year 1953
exhibit A.
margins for
Increase
(Decrease)
$166,865.98
22,o4l.6l
54,338.25
13,881.17
16,643.03
53,940.66
2,031.20
2,269.68
165,145.60
39,052.52
204,198.12
14,789.47
189,408.65
$129.140.38
15,282.96
25,248.25
20,583.21
12,149.94
47,604.551,950.24
3,401.21
126,220.36
43,066.03
169,286.39
16,363.60
152,922.79
$37,725.60
6,758.65 .
29,090.00
(6,702.04)
4,493.09
6,336.11
80.96
(1,131.53)
38,925.24
(4.013.51)
34,911.73
(1,574.13)36,485.86
Since a more detailed accounting system was adopted in 1954, it
became necessary in the preparation of the above comparative statement
to reclassify several expense items for both years, 1953 and 1954.
The following statement summarizes the Company's financial trans-
actions effecting changes in capital structure and utility plant exten-
sions. This statement shows the source of funds made available in 1954
and how these funds were used:
SOURCE OF FUNDS:
Funds derived from shareholders:
Net margin (loss) on operations —exhibit A $(22,5^2.67)
Add depreciation, a charge re-
quiring no direct outlay
of funds 39.052.52 $ 16,509.85
Stock assessments 108,000.00
Contributions for meters,
services, pipeline
extensions, etc. 16,165.46
Inclusion fees, stock releases,
and miscellaneous 943.51 $l4l,6l8.82
Decrease in net working capital 12,691.22
$154.310.04
HOW FUNDS WERE APPLIED:Net loss on retirement of fixed assets $ 3>938.64
Refund to shareholders for overcharges
on 1953 water sales 623.61
Current charges against the assessment 5,276.21
Adjustments to assessment #47 198.67
Company stock acquired through
delinquent assessments 148.91
Increased investment in workin progress 5,258.66
Additions to fixed assets (excluding
revaluation of meters and services):
Transmission and distribution lines $113,737.90
Tractor 3,245.62
1954 Chevrolet 1,948.87
Ford truck 2,045.00
Equipment, office furniture andfixtures, etc. 6,128.29 127,105.68
Retirement of long-term debt 11.759.66
COMMENTS RESPECTING FINANCIAL POSITION
The statement of financial position is presented on exhibit B.
The following statement is a condensed comparison of the Company's
financial position at December 31, 1954 and December 31, 1953:
COMPARATIVE STATEMENT OF FINANCIAL POSITION
December
31. 1954
December
31. 1953
CURRENT ASSETS:
Cash on hand and on deposit
Accounts receivable
Prepayments
Total current assets
Less current liabilities
Net working capital
ADD OTHER ASSETS:
Investments
Plant and equipment (net
book value)
Deferred charges
DEDUCT LONG-TERM OBLIGATIONS
Shareholders' equities
(5,973.21)
54,925.18
48,207.17
6,718.01
5,178.91 5,030.00
882,171.11
_ 6.378.66
887,755.4?
22,210.70
652,566.98
1.120.00
665,434.9933,970.36
Increase
(Decrease)
5,889.40 $ 8,153.21 $
13,340.70 15,215.09
29.547.27 31.556.88
48,777.3754.750.58
2,263.8!
1,874.392.009.61
6,147.81
6.543.41
(12,691.22)
148.91
229,604.13
5,258.66
222,320.48
(11,759.66)
$631.464.63 $234.080.14
Following is a summary of changes in shareholders' equities during
the year:
SHAREHOLDERS' EQUITIES WERE INCREASED BY:
Stock assessments
Contributions for meters, services,
pipeline extensions, etc.
Appraisal increase on valuation of
meters and services
Inclusion fees
Oceanside and North Carlsbad stock releases
Miscellaneous
SHAREHOLDERS' EQUITIES WERE REDUCED BY:
Net loss on abandoned fixed assets
Refund of overcharges on 1953 water sales
Adjustments to assessment #47
Current charges against assessment
Net loss on operations for 1954--exhibit A
Net increase in shareholders'
equities as shown above
$108,000.00
16,165.46
141,550.97443.10
375.76
124.65 266,659.94
3,938.64623.61
198.675,276.21
22,542.67 32,579.80
$234,080.14
Exhibit A
CARLSBAD MUTUAL WATER COMPANY
Statement of Operations and Margins
January "L, 1954 to December 31. 1954
CREDITS:
Shareholder water users water
purchases (1,952.18 acre feet) $147,463.12
Water stock transfer fees l,l6o.OO
Commissions earned 2,299.26
Gain on sale of land 13,363.30
Other miscellaneous credits 2.580.30
Total credits $166,865.98
CHARGES:
Water production and
purification expense:
Power $ 3,932.86Purification and production
supplies and expense 6,674.25
Purchased water 11,444.00
Repairs and maintenance 3,923.36
Depreciation 6.909.52 32,883.99
Water transmission and
distribution expense:Power 9,948.31
Pipeline rental 4,188.65
Repairs, maintenance, and
supplies 45,415.71
Other transmission and
distribution expense 4,733.89
Depreciation 26.723.80 91,010.36General overhead:
Operation and maintenance--
mobile equipment 3,901.03
Shop supplies, small tools, and
maintenance of structures 5,980.69Workmen's Compensation insurance 1,473.12
Other general plant expense 5,288.19
Depreciation 4.756.32
Total 21,399.35
Less overhead applied to Jobs 8,974.99 12,424.36
Administrative expense:
Office salaries 17,400.94General manager 8,415.19
Directors' fees 820.00
Legal and accounting 3,116.05
Taxes and insurance 18,177.32
Office maintenance, supplies,
and expense 4,146.53
Other administrative expense 1,864.63Depreciation 662.88
Total 54,603.54
Less expense applied to Jobs 5.814.48 48,789.06
Debt service expense 2,031.20Water resources, conservation, and
developmental expense 1,420.19
Assessments expense 849.49
Total charges 189.408.65
Net margin (loss) on operations $(22.542.67)
Exhibit B
CARLSBAD MUTUAL WATER COMPANY
Statement of Financial Position
At December 31. 1954
ASSETS
CURRENT ASSETS:
Cash on hand and in depositories
Accounts receivable:Water consumer accounts $10,808.15
Sales and services 2,532.55
Prepayments:
Inventory of materials and
supplies 23,436.64
Less reserve for
Inventory losses 3,320.31
20,116.33Refundable deposits 500.00
Prepaid taxes 7,437.26
Prepaid general and employee
group health insurance 1.493.68
Total current assets
INVESTMENTS;
Escondido Mutual Water Company stock
Carlsbad Mutual Water Company stock—from
delinquent assessments
Berkeley Bank for Cooperatives stock
(pledged as security on loans)
PLANT EQUIPMENT:Land, water rights, and rights of wayConsumer meters and services
Wells, reservoirs and dams
Purification equipment
Booster pumps and stationsTransmission and distribution lines
Buildings
Autos and trucks
Equipment
Office furniture and fixtures
Total cost
Less allowance for depreciation
Net plant and equipment (encumbered
by deed of trust—Berkeley Bank for
Cooperatives)
DEFERRED CHARGES:
Construction work in progress
Other deferred charges
5,889.40
13,340.70
29,547.27
30.00
148.91
5,000.00
67,621.22
220,949.00209,413.21
23,537.20
35,545.92
615,625,23
13,186.0316,954.985,506.08
12.705.301,221,044.17338.873.06
$ 48,777.37
5,178.91
882,171.11
6,253.66
125.00 6,378.66
Exhibit B
CARLSBAD MUTUAL WATER COMPANY
Statement of Financial Position
At December 31. 1954"
LIABILITIES AND SHAREHOLDERS' EQUITIES
CURRENT LIABILITIES:
Accounts payable $ 17.679.57
Accrued interest and taxes 9.161.22
Employee prepaid group insurance 116.97
Note payable—Security Trust and Savings Bank 20,000.00
Notes payable—Berkeley Bank for Cooperatives
(portion maturing within one year) 6,666.66
Refunds payable—shareholders (overcharges
on 1954 water usage) 1.126.16
Total current liabilities $ 54,750.58
LONG-TERM OBLIGATIONS:
Bonds payable on sewer assessments 544.00
Notes payable to Berkeley Bank for
Cooperatives—secured by deed of
trust on plant and land:
Loan P-4163 $ 15,000.00
Loan P-2049 13.333.36
28,333.30Less portion maturing
within one year, shown
as current liability 6.666.66 21.666.70 22,210.70
SHAREHOLDERS' EQUITIES;
2,000 shares Class "A" capital
stock, $50.00 par value,
issued and outstanding 100,000.00
Capital surplus 329,936.95
Reserve fund 8,668.68
Capital stock assessments 963,318.97
Less depreciation and other
charges absorbed by
assessments 536.379.83 426.939.14
Total shareholders' equities 865,544.77
$942.506.05