Name

Social security number

Percent of time devoted to

business

Percent of stock owned

Amount of compensation

Marissa Hunt

435-54-2342

100%

.05%

$235,000

Dakon Williams

243-98-3242

100%

.03%

$195,000

Deon Johnson

194-23-7435

100%

0%

$165,000

Jennifer Conley

623-53-3920

100%

0%

$150,000

Near the end of the year, FF switched its property and casualty insurance company. As a result, the plan year for its insurance contract was altered. On December 31, 2019 FF prepaid insurance premiums of

$25,000 representing coverage through February 15, 2020 as a condition of being accepted by the new company. FF did not expense any of the prepayment for financial accounting purposes.

FF rents from vendors several pieces of equipment to use in its business. As of December 31, 2018 and December 31, 2019, respectively, FF had prepaid vendors for equipment rental of $30,000 for January 2019 and $35,000 for January 2020.

On December 26, 2019 FF prepaid a contractor $17,500 to repair several pieces of maintenance shop equipment in January of 2020. FF fully expects that the contractor will have completed the project by January 31, 2019.

All the accrued wages and bonus amounts on the financial statements as of December 31, 2018 were paid on February 28, 2019.

As of December 31, 2018 and 2019, respectively, FF had vacation accruals on its books of $29,000 and

$35,000. As of March 15, 2019 and 2020, respectively, FF had paid $5,000 and $8,000 of those accrued amounts.

On December 2, 2019, the millionth customer entered the park. To recognize the accomplishment and to promote the amusement park through print and radio media advertisements, FF held a give-away contest wherein the lucky customer deemed to be the millionth customer would be given $100,000.

The check was presented to the lucky winner on January 15, 2020.

The land on which FF resides is owned by the county. FF has a very favorable lease with the county that allows FF the ability to sublease any portion of the ground to another tenant. The board of directors of FF made the decision in the fall of 2019 to seek out a tenant for unimproved land that would not be utilized in any potential expansion plans. FF identified the potential renter and entered into a contract with the renter on December 1, 2019. The rent period is to begin on January 1, 2020; however, as part of the contract, the renter was required to pay a full six-month rental amount ($50,000) to FF by December 31, 2019. FF received a check of $50,000 on December 27, 2019 from the renter. This rental payment is not refundable to the renter under any circumstances.

FF maintains an inventory of several items that it uses in its amusement park. Inventory is valued at cost. FF has never has never changed it inventory method. FF uses specific identification for its inventory. FF has never written down any subnormal goods.The rules of Section 263A (Unicap) apply to FF. The Unicap calculated costs related to ending inventory at December 31, 2018 and 2019, respectively, were $15,000 and $19,000. Total current year 263A costs were $22,610, with $18,610 included in COGS during 2019. FF does not include any of its salary and wage expenses as labor costs for COGS.

On December 1, 2019, FF paid a $400,000 (total) dividend to all common stockholders.

During the year, FF made Federal estimated income tax payments of $72,500 each on April 15, June 15, September 15 and December 15 of 2019 ($290,000 in total). If FF has overpaid its current year estimated taxes, it would like to apply the excess to its estimated tax payments for next year. FF is NOT a "large corporation." FF's 2018 tax liability was $200,000.

FF made California state estimated income tax payments of $15,000 each on April 15, June 15, September 15 and December 15 of 2019 ($60,000 in total).

Financial Statements (kept on a GAAP basis):

FUN FAIR OF VENTURA, INC.

Balance Sheet

Assets:

12/31/18

12/31/19

Cash

$ 165,000

$ 129,000

Accounts Receivable

128,000

75,000

Less: Allowance for Bad Debts

(43,000)

(49,000)

Inventory

422,000

390,000

Tax-exempt Securities

150,000

150,000

Publicly Traded Stocks

200,000

200,000

Fixed Assets

24,000,000

28,000,000

Less: Acc. Depreciation

(13,542,000)

(12,892,000)

Prepaid Insurance

0

25,000

Prepaid Rent

30,000

35,000

Prepaid Installation Contract

0

17,500

Other Assets

150,000

250,000

Total Assets:

$11,660,000

$16,330,500

Liabilities and Shareholders' Equity:

Accounts Payable

48,000

62,000

Accrued Wages

123,000

118,000

Accrued Bonuses

68,500

39,000

Accrued Vacation

29,000

35,000

Legal Settlement Accrual

0

190,000

Prize Accrual

0

100,000

Unearned Rental Income

0

50,000

Note Payable-First Bank of CA (Credit Line)

1,540,000

1,084,000

Note Payable-Equipment Leasing, Inc.

7,112,000

11,728,000

Capital Stock

100,000

100,000

Additional paid-in Capital

2,000,000

2,000,000

Retained Earnings-Unappropriated 639,500 824,500

Total Liabilities and Shareholders' Equity: $11,660,000 $16,330,500

Income Statement for the period ending December 31, 2019 Item Amount

Income:

Gross Sales

$26,523,275

Less: Returns

(113,500)

Net Sales

26,409,775

Cost of Goods Sold

(2,052,500)

Dividend Income

14,300

Interest Income

2,650

Municipal Bond Interest Income

2,300

Total Income:

24,376,525

Expenses:

Employee Salaries

13,905,600

Repairs and Maintenance

492,350

Bad Debts

58,000

Rent

1,543,000

Payroll Taxes

1,112,400

Licensing Fees

10,750

Property Taxes

277,000

Interest Expense

781,000

Depreciation

1,350,000

Office Supplies

33,950

Employee Training

53,750

Safety Expenses

31,000

Political Contribution

2,500

CA Safety Commission Fine

5,000

Advertising

290,500

Admission Supplies

143,250

Meals and Entertainment

8,500

Travel

13,550

Insurance

215,000

Legal Settlement

190,000

Prize Contest Expense

100,000

Fuel

158,675

Utilities

2,530,500

Telephone

135,250

Total Expenses before taxes:

$23,441,525

CA state income tax expense

60,000

Federal tax expense

290,000

Total income taxes

$350,000

Net Income:

$ 585,000