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Opening of Bids - High Street Sidewalk Improvements Proj No. 123-012 - Selge Construction
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Opening of Bids - High Street Sidewalk Improvements Proj No. 123-012 - Selge Construction
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5/14/2024 3:55:45 PM
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5/14/2024 3:52:31 PM
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Board of Public Works
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Projects
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5/14/2024
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Selge Construction Company, Inc. <br />Notes to Financial Statements <br />Note 1. Nature of Business and Significant Accounting Policies <br />Nature of business: Selge Construction Company, Inc. (the Company) is a commercial contractor <br />specializing in the construction of underground sewer and water mains. The Company's contracts are <br />typically with businesses and municipalities in northern Indiana and southern Michigan. <br />Significant accounting policies: <br />Use of estimates: The preparation of financial statements in conformity with accounting principles <br />generally accepted in the United States of America requires management to make estimates and <br />assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets <br />and liabilities at the date of the financial statements and the reported amounts of revenues and expenses <br />during the reporting period. Accordingly, actual results could differ from those estimates. <br />Variable interest entity: The Company has elected an accounting alternative as provided for in <br />Accounting Standards Update (ASU) No. 2018-17, Consolidation (Topic 810): Targeted Improvements to <br />Related Party Guidance for Variable Interest Entities, issued by the Financial Accounting Standards <br />Board (FASB). Pursuant to this election, the Company did not apply the variabie interest entity (VIE) <br />guidance in Accounting Standards Codification (ASC) 810 to assess certain entities under common <br />control for consolidation for the years ended February 28, 2023 and 2022. See Note 12 for additional <br />information. <br />Cash: The Company has cash on deposit in financial institutions which, at times, may be in excess of <br />Federal Deposit Insurance Corporation limits. <br />Contract receivables: Contract receivables are carried at original invoice amount less an estimate made <br />for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Contract <br />receivables in the accompanying balance sheets at February 28, 2023 and 2022, are stated net of an <br />allowance for doubtful accounts of $15,000. Management determines the allowance for doubtful accounts <br />by identifying troubled accounts and by using historical experience applied to an aging of accounts. <br />Contract receivables are written off when deemed uncollectible. Recoveries of contract receivables <br />previously written off are recorded when received. A contract receivable is considered past due if any <br />portion of the receivable balance is outstanding for more than 30 days. The Company generally does not <br />charge interest on past due receivables. <br />Contract receivables represent amounts billed to customers under customary industry credit terms. In <br />accordance with construction industry practice, retainage is a portion of the final payment of a contract <br />that is withheld until the project is complete in accordance with the terms of the contract. The Company <br />records retainage receivables on long-term contracts as a component of receivables. Retainage amounts <br />outstanding at February 28, 2023 and 2022, are approximately $1,255,500 and $457,000, respectively, <br />Property and equipment: improvements and betterments are capitalized: routine maintenance and <br />repairs are charged to expense as incurred. When equipment is retired or otherwise disposed of, the cost <br />and related accumulated depreciation are removed from the respective accounts and any gains or losses <br />arising from the disposition are reflected in income. <br />
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