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CARLSBAD MUTUAL WATER COMPANY
Carlsbad. California
Report of Audit
January 1. 1957 to December 31. 1957
EVERTS AND ESENOFF
CERTIFIED PUBLIC ACCOUNTANTS
San Diego. California
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Occanside, California 1:1 Cajon, California
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L.S.EVERTS, C. F. A.(1916-19-461
CARL M. ESENOFF, C P A.
ALBERT M. HUDSON, C. P. A.
JOHN T.SWAN,C.P. A.
HAMILTON MOODY, C. t. A.
CHARLES C. PORTER, C. P. A.
HERBERT L. BECKETT, C. P. A.
CHARLES W. LAMDEN.C. P. A.
ROY M. HERAMB, C. P. A .
TELEPHONE BELMONT 4-6101
EVERTS AND ESENOFF
CERTIFIED PUBLIC ACCOUNTANTS
SUITE 727 FIRST NATIONAL BUILDING
SAN DIEGO I.CALIFORNIA
MEMBERS
AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
CALIFORNIA SOCIETY OF
CERTIFIED PUBLIC ACCOUNTANTS
OTHER OFFICES
EL CAJON.CALIFORNIA
OCEANSIDE,CALIFORNIA
February 28, 1958
Mr. C. A. Anthony
Board of Directors
Carlsbad Mutual Water Company
Carlsbad, California
Dear Sir:
V/e have examined the financial records of the Carlsbad Mutual Water Company, and
have prepared the attached statement of financial position at December 31, 1957 and
related statement of operations and margins for the year then ended.
The Board of Directors decided in December, 1957 to combine the audit of 1957
operations with the final liquidation audit, which was to be performed when the City
of Carlsbad assumed operations of the Company. When it appeared that the transfer
of the Company to the City would be delayed, the Board asked us in February, 1958 to
resume the 1957 audit. Due to these circumstances we were unable to perform the
following audit procedures as of December 31. 1957:
1 . Count the cash on hand
2. Observe the physical inventory
3. Confirm the accounts receivable by the sending
of verification requests
Our examination was made in accordance with generally accepted auditing standards,
except for the omission of the above mentioned procedures. Because of the omission
of these generally accepted auditing procedures, we are not in a position to render
an independent accountant's opinion as to the attached financial statements. How-
ever, nothing came to our attention which would indicate that they are not stated
fairly.
Yours very truly,
C For Everts and Esenoff
Certified Public Accountants
COMMENTS RESPECTING OPERATIONS AND MARGINS
Following is a brief comparative statement of operations for the years 1957 and
1956. The statement of operations and margins for the year 1957 is shown in more
detail on exhibit A.
Quantity of water billed to shareholder
water users (acre feet)
Credits:
Shareholder water users water purchases,
transfer charges, commissions, etc.
Charges:
Water production and purification
Water transmission and distribution
General overhead
Admi nistrative
Debt service expense
Water conservation and development
Assessment expense
Total charges
Net margin (loss) on operations
Increase
Year 1957 Year 1956 (Decrease)
$190.548.29 $213.493.52 $(22.945.23)
52,005.53
74,600.62
12,387.31
54,772.17
786.78
1,315.56
570.33
42,928.54
75,061.40
14,886.34
48,608.85
873.06
1,414.46
511.48
9,076.99
(460.78)
(2,499.03)
6,163.32
(86.28)
(98.90)
58.85
196.438.30 184.284.13 12.154.17
The following statement summarizes financial transactions affecting changes in
capital structure and utility plant extensions. This statement shows the source of
funds derived in 1957, and how these funds were used.
SOURCE OF FUNDS:
Funds derived from shareholders:
Net margin (loss) on operations
Add depreciation, a charge requiring
no direct outlay of funds
Stock assessment
Contributions for meters, services and
pipeline extensions
Pi peli ne fees
Sale of stock in Berkeley Bank for Cooperatives
Sale of adding machine at net book value
Allowance on 1955 Plymouth traded
Decrease in net working capital
$(5,890.01)
40.191.71 $34,301.70
50,000.00
13,778.73
926.58 $ 99,007.01
800.00
225.00
615.43
45.983.80
$146.631.24
HOV FUNDS WERE APPLIED:
Additions to plant and equipment:
Transmission and distribution lines
Meters and services (net)
Booster stations and connections with
Municipal line
1957 Chevrolet automobile
Additions to welding trailer
Power mower
Office equipment
Construction work in progress
Payment of final installment on loan with
Berkeley Bank for Cooperatives
Annual installments on sewer bonds
Refund of 1956 overcharge to shareholder
water users (credited on 1957 assessment)
$57,922.57
15,709.29
36,010.29
1,732.43
85.78
86.37
572.73 $112,119.46
234.39
5,000.00
68.00
29.209.39
$146.631.24
COMMENTS RESPECTING FINANCIAL POSITION
The statement of financial position at December 31, 1957 is presented on exhibit
B. Following is a condensed comparison of the Company's position at December 31,
1957 and December 31, 1956.
COMPARATIVE STATEMENT OF FINANCIAL POSITION
December
31. 1957
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)
Construction work in progress
DEDUCT OTHER LIABILITIES:
Refunds payable—shareholder
water users
Long-term obligations
December
31. 1956
12,554.58
26,342.79
46.016.70
84,914.07
31.062.81
53,851.26
991.54
1,002,311.88
1 ncrease
(Decrease)
$(10,571.17)
(11,042.52)
12.282.72
(9,330.97)
36.652.83
(45,983.80)
(800.00)
68,639.12
234.39
1,983.41
15,300.27
58.299.42
75,583.10
67.715.64
7,867.46
191.54
1,070,951.00
234.39
1.079.244.39 1.057.154.68 22.089.71
340.00
340.00
29,209.39
5.408.00
34.617.39
(29,209.39)
(5.068.00)
(34.277.39)
SHAREHOLDERS' EQUITY
Following is a summary of changes in shareholders' equities during the year:
SHAREHOLDERS' EQUITIES WERE INCREASED BY:
Stock assessments $50,000.00
Contributions for meters, services, and
pipeline extensions 13,778.73
Pipeline fees 926.58
Total $64,705.31
SHAREHOLDERS' EQUITIES WERE DECREASED BY:
Loss on operations—exhibit A 5,890.01
Loss on trade-in of 1955 Plymouth 678.51
Loss on retirement of pipelines 1.769.69
Total
Jf/C ?ti- uf
Net efc'Dnoosc in shareholders' equities, as shown above
Exhibit A
CARLSBAD MUTUAL WATER COMPANY
Statement of Operations and Margins
January 1. 1957 to December 31. 1957
CREDITS:
Shareholder water users water
purchases (1,811.59 acre feet) $179,910.60
Water stock transfer fees 1,492.50
Commissions earned 1,654.32
Water and assessment penalties 3,162.90
Pipeline rental 3,937.05
Other miscellaneous credits 390.92
Total credits $190,548.29
CHARGES:
Water production and purification expense:
Power $ 4,300.04
Purification and production supplies
and expense 6,093.81
Purchased water 28,984.38
Repairs and maintenance 2,600.19
Depreciation 10.027.11 52,005.53
Water transmission and distribution expense:
Power 11,608.52
Pipeline rental 4,428.72
Repairs, maintenance and supplies 24,979-60
Other transmission and distribution expense 10,591.59
Depreciation 22.992.19 74,600.62
General overhead:
Operation and maintenance--mobile
equipment 5,375-30
Shop supplies, small tools, and
maintenance of structures 3,919-32
Workmen's compensation insurance 390.87
Other general plant expense 3,280.56
Depreciation 5.551.41
Total 18,517.46
Less overhead applied to jobs 6.130.15 12,387.31
Administrative expense:
Office salaries 16,351.84
General manager 5,820.73
Directors' fees 700.00
Legal and accounting 1,329.44
Taxes and insurance 27,440.41
Office maintenance, supplies and expense 4,025.10
Other administrative expense 993-94
Depreciation 1.621.00
Total 58,282.46
Less expense applied to jobs 3.510.29 54,772.17
Debt service expense 786.78
Water resources conservation and
development expense 1,315-56
Assessment expense 570.33
Total charges 196.438.30
Net margin (loss) on operations $ (5.890.01)
Note: Reference is made to the comments accompanying this report.
Statement of Financial Position
at December 31. 1957
Exhibit B
CARLSBAD MUTUAL WATER COMPANY
Statement of Financial Position
at December 31. 1957
ASSETS
CURRENT ASSETS:
Cash on hand and in depositories
Accounts receivable:
Water consumer accounts
Sales and services
Prepayments:
Inventory of materials and supplies
Less reserve for inventory losses
Prepaid taxes
Prepaid employee retirement and
1i fe insurance
Prepaid general and employee group
i nsurance
Prepaid interest on installment contracts
Total current assets
INVESTMENTS:
Carlsbad Mutual Water Company stock from
delinquent assessments
PLANT AND EQUIPMENT:
Land, water rights, and rights of way
Consumer meters and services
Wells, reservoirs, and dams
Purification equipment
Booster pumps and stations
Transmission and distribution lines
Bui 1di ngs
Autos and trucks
Equipment
Office furniture and fixtures
Total
Less allowance for depreciation
Net plant and equipment
$13,117.72
2.182.55
43,166.95
718.90
42,448.05
11,069.46
3,264.58
1,361.07
156.26
1,983.41
15,300.27
58.299.42
65,
271,
220,
27,
71.784,
13,
20,
9,
13.
1,497,
426.
$ 75,583.10
191.54
114.92
142.29
414.75
686.73
911.28
273.88
324.23
359.33
384.03
656.83
268.27
317.27
OTHER ASSETS:
Construction work in progress
1,070,951.00
234.39
Note: Reference is made to the comments accompanying this report.
Exhibit B
CARLSBAD MUTUAL WATER COMPANY
Statement of Financial Position
at December 31. 1957
LIABILITIES AND SHAREHOLDERS' EQUITIES
CURRENT LIABILITIES:
Accounts payable
Auto contracts payable
Note payable—bank—unsecured
Employee prepaid portion of group
health insurance
Accrued payroll and employee
withholding tax
Accrued interest
Property taxes payable
Total current liabilities
LONG-TERM OBLIGATIONS;
Bonds payable on sewer assessments
SHAREHOLDERS' EQUITIES:
2,000 shares, Class "A" capital stock,
$50.00 par value, authorized
and issued
Capital surplus
Reserve for dissolution expense
Capital stock assessments
Less depreciation and other
charges absorbed by assessments
Total shareholders' equities
$ 43,559.44
1,853.50
10,000.00
47.62
989.72
195.83
11.069.53
$ 67,715.64
340.00
$1,133,318.97
100,000.00
380,503.37
5,000.00
539.917.95 593.401.02
1,078,904.39