Opening of Bids - 3400 Block S. Michigan Street Improvements Proj No. 120-062 - Premium Concrete Services, Inc.

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PREMIUM CONCRETE SERVICES, INC. NOTES TO THE FINANCIAL STATEMENTS December 31, 2019 and 2018 NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS Premium Concrete Services, Inc. is a concrete contractor engaged in commercial and residential concrete construction activities in northern Indiana. The work is performed under various types of agreements including fixed price and cost type arrangements. Concentration of risk is minimal due to the diversity of clients' industries and the non-recurring nature of contracts. ACCOUNTING METHOD FOR RECORDING PROFITS OR LOSSES ON CONTRACTS Profits on contracts are recorded on the bases of the Company's estimates of the percentage of completion of individual contracts, commencing when progress is sufficient to estimate final results with reasonable accuracy. That portion of the total contract price is accrued which is allocable, on the bases of the Company's estimates of the percentage of completion, to contract expenditures incurred and work performed. As these contracts extend over one or more years, revisions in cost and profit estimates during the course of the work are reflected in the accounting period in which the facts requiring the revision become known. At the time a contract loss becomes known, the entire amount of the estimated ultimate loss on the contract is accrued. CASH EQUIVALENTS For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. ACCOUNTS RECEIVABLE Trade accounts receivable are stated at cost less an allowance for doubtful accounts. Management establishes an allowance for uncollectible accounts based on past collection experience and by analyzing each account Independently to assess collectability and the need for an allowance.