SOCC, INC. dba
SEVEN OAKS COUNTRY CLUB
NOTES TO FINANCIAL STATEMENTS
Measure of operations: The statements of activities report all changes in net assets, including changes in net assets from operating and nonoperating activities. Operating activities consists of those items attributable to the Club ’s ongoi ng activities. Nonoperating activities are limited to resources that generate return from other activities considered to be of a more unusual or nonrecurring nature. Use of estimates: The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Equity memberships : Each Equity Member shall have voting rights, as stated in the Club's Bylaws. The Club has the right to sell up to 785 active Equity Memberships. Each Equity Member is allowed full access to the Club facilities in accordance with the Club Regulations. The redemption of an Equity Membership certificate is contingent upon and funded by the purchase of an Equity Membership by an incoming replacement member, subject to a 30% transfer fee. Members may also resign their membership by surrendering their equity to the Club. The Board of Governors (Board) has the power to grant the use of Club Facilities to Licensees designated as "Social Members." Social Members will have rights to use the Club Facilities, excluding the golf course and golf locker rooms. The Club has the right to sell up to 400 active Social Memberships, subject to an increase. Cash and cash equivalents : For purposes of reporting cash flows, the Club considers all cash accounts which are not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Club maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Club has not experienced any losses in such accounts. The Club believes it is not exposed to any significant credit risk on cash and cash equivalents. The allowance for doubtful accounts is recorded based on certain percentages of aged receivables, which are determined based on historical experience and management ’s assessment of the general financial conditions affecting the Club ’s member base. If actual collections experience changes, revisions to the allowance may be required. There are a limited number of members with individually large amounts due at any given statement of financial position date. Any unanticipated change in one of those members ’ credit worthiness or other matters affecting the collectability of amounts due from such members, could have a material effect on our results of operations in the period in which such changes or events occur. After all attempts to collect a receivable have failed, the receivable is written off against the allowance an d the member’s club memb ership is terminated. Allowance for doubtful accounts:
Inventories: Inventories consist of food, beverages, liquor and golf supplies, equipment and clothing which are stated at the lower of cost (first-in, first-out method) or net realizable value.
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