Opening of Bids - Martin Luther King Jr. Center Demolition Proj No. 121-066 - Green Demolition Contractors, Inc.

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Green Demolition Contractors, Inc. Notes to the Financial Statements 1. Nature of Operations Green Demolition Contractors, Inc. (Company) is a demolition contractor engaged in the deconstruction of industrial, commercial, municipal and privately -owned buildings primarily in the greater Chicagoland area. The work is generally performed under fixed price contracts. The length of contracts varies and generally does not extend beyond one year. The Company commenced operations on July 30, 2007. 2. Summary of Significant Accounting Policies Use of Estimates — Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP). Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. Significant estimates used in the preparation of these financial statements include the following: The Company has estimated an allowance for doubtful accounts of $140,000 at December 31, 2021. This conclusion is based on the status and age of contracts receivable. The Company has many contracts in various stages of completion. The Company must make estimates of the extent and progress towards completion, contract revenue and contracting costs, and it uses the cost to cost method of accounting for all of its long-term contracts. For the above mentioned estimates, it is reasonably possible that the recorded amounts could significantly change in the near future, as new information is available. Revenue Recognition — Demolition work is a single performance obligation that is satisfied over time. The Company recognizes contract revenue for financial reporting purposes over time. Progress toward completion of the Company's contracts is measured by the percentage of cost incurred to date to estimated total costs for each contract. The Company tracks demolition work by customer industry. The approximate percentages of customer revenues to total demolition revenue was school districts 17%, commercial businesses 5%, governments 43%, and healthcare 35%. As part of the Company's demolition work, the Company also salvages certain material to sell for an additional revenue stream. This revenue is recognized at a certain point in time upon sale. Total scrap revenue represents approximately 18% of total revenue. sm