Gables Estates Financials 2010/11
Table of Contents
Independent Auditor’s Report 1
Balance Sheets 2
Statements of Revenues, Expenses
and Changes in Members’ Equity 3
Statements of Cash Flow 4
Notes to Financial Statements 5 – 7
Schedule of Revenues and Expenses -
Budget vs. Actual 9
Member of American and Florida Institutes of Certified Public Accountants
JOE A. CATARINEAU, CPA
CONNIE F. CATARINEAU, CPA, CVA
Email: catarineaucpa@bellsouth.net
www.catarineaucpa.com
7780 S.W. 117
th AVENUE, SUITE 201 ● MIAMI, FLORIDA 33183 ● PHONE (305) 596-7883 ●
FAX (305) 596-4577
Independent Auditor’s Report
To the Board of Governors
Gables Estates Club, Inc.
Coral Gables, Florida
We have audited the accompanying balance sheets of Gables Estates Club, Inc. as of
September 30, 2011 and 2010, and the related statements of revenues, expenses and changes
in members’ equity and cash flows for the years then ended. These financial statements are
the responsibility of the Association’s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of Gables Estates Club, Inc. as of September 30, 2011 and
2010, and the results of its operations and cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole. The information included in the schedule of revenues and
expenses – budget vs. actual is presented for additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements, and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements taken as a whole.
Catarineau & Givens, P.A.
Miami, Florida 33183
October 24, 2011
ASSETS 2011 2010
Current Assets:
Operating cash and cash equivalents $ 528,545 $ 159,353
Cash and cash equivalents (Contingency) 500,000 500,000
Cash and cash equivalents (Board designated for roads) – 370,000
Total Current Assets 1,028,545 1,029,353
Property and Equipment, at cost:
Information center 307,182 307,182
Office equipment 16,656 16,656
323,838 323,838
Less: accumulated depreciation (193,931) (188,225)
Total Property and Equipment, net of
accumulated depreciation 129,907 135,613
Other Assets:
Delinquent maintenance dues receivable, net of allowance (Note 3) 18,000 24,000
Utility deposit 1,386 1,386
Total Other Assets 19,386 25,386
TOTAL ASSETS $ 1,177,838 $ 1,190,352
LIABILITIES AND MEMBERS’ EQUITY
Current Liabilities:
Accounts payable $ 1,291 $ 1,291
Accrued expense 32,201 34,164
Rehabilitation of cats – Resident Exchange 617 -
Income taxes payable – 1,926
Payroll taxes payable 1,293 -
Total Current Liabilities 35,402 37,381
Members’ Equity 1,142,436 1,152,971
TOTAL LIABILITIES AND MEMBERS’ EQUITY $ 1,177,838 $ 1,190,352
September 30, 2011 and 2010
Gables Estates Club, Inc.
Balance Sheets
See accompanying notes and accountant’s report
2
REVENUES: 2011 2010
Annual dues $ 1,158,000 $ 1,158,000
Application fees 410,000 315,000
Interest on investments 12,679 1 5,483
Architectural fees 20,400 2 8,830
Landscaping income 18,315 1 8,315
Interest on fees 5 ,855 10,011
Miscellaneous income 6 ,907 2 06
TOTAL REVENUES 1,632,156 1,545,845
EXPENSES:
Guard expenses 664,792 733,782
Road improvements 367,403 -
Landscaping maintenance and related salaries 163,366 144,777
Refund to members 100,000 100,000
Salaries 6 8,235 6 4,159
Security police 54,207 5 2,550
Capital improvements 39,495 9 ,655
Information center expense 19,392 2 7,239
Legal 1 6,208 4 3,944
Block party (promotional expense) 14,780 1 5,747
Holiday bonus 14,348 1 6,655
Insurance 13,626 1 5,348
Credit reports 11,114 1 0,275
Equipment maintenance – Camera 10,861 9 ,300
Professional fees 10,663 1 2,675
Architectural fees 9 ,030 13,520
Scanning project costs 8 ,346 -
Taxes and licenses 7 ,779 7 ,621
Employee benefit expense 6 ,823 6 ,839
Pest Control 6 ,400 -
Meeting 5 ,800 6 ,073
Office and administration 7 ,105 7 ,731
Depreciation 5 ,706 5 ,705
Children’s club expenses 3 ,536 4 ,120
Equipment maintenance – Traffic control 2 ,785 6 ,331
Telephone 2,188 2 ,706
Awards and gift baskets 2 ,130 -
Postage and printing 1 ,831 2 ,253
Equipment maintenance – Beam 1 ,342 1 ,681
Maintenance and repairs 1 ,200 2 ,306
Miscellaneous 8 22 2 ,610
Yacht club expenses 8 08 4 17
Website 5 70 6 36
Bad debt – 30,000
Medical expense – 3 ,230
Auto mileage reimbursement 3 ,575
TOTAL EXPENSES 1,642,691 1,363,460
NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES (10,535) 182,385
PROVISION FOR INCOME TAXES – 1,926
NET INCOME (LOSS) (10,535) 180,459
MEMBERS’ EQUITY, BEGINNING OF YEAR 1,152,971 972,512
MEMBERS’ EQUITY, END OF YEAR $ 1,142,436 $ 1,152,971
Gables Estates Club, Inc.
Statements of Revenues, Expenses and Changes in Members’ Equity
Years Ended September 30, 2011 and 2010
See accompanying notes and accountant’s report 3
2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ ( 10,535) $ 180,459
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation 5,705 5,705
(Increase) Decrease in:
Payroll taxes receivable – 845
Maintenance dues receivable 6,000 42,000
Increase (Decrease) in:
Accounts payable – ( 48,508)
Accrued expenses ( 1,962) 26,764
Income taxes payable ( 1,926) 1,926
Payroll taxes payable 1,293 -
Exchange 617 -
Prepaid maintenance dues – ( 6,000)
NET CASH PROVIDED BY (USED BY)
OPERATING ACTIVITIES ( 808) 203,191
NET INCREASE (DECREASE) IN CASH ( 808) 203,191
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,029,353 826,162
CASH AND CASH EQUIVALENTS, END OF YEAR $ 1,028,545 $ 1,029,353
Gables Estates Club, Inc.
Statements of Cash Flows
Years Ended September 30, 2011 and 2010
See accompanying notes and accountant’s report 4
5
Gables Estates Club, Inc.
Notes to Financial Statements
Years Ended September 30, 2011 and 2010
NOTE 1 – NATURE OF ORGANIZATION
Gables Estates Club, Inc. is a homeowners’ association incorporated in the State of Florida. The Club
is responsible for the operation of the homeowners’ association. Gables Estates Club, Inc. consists of
193 lots located in Miami – Dade County.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
On July 1, 2009, the Financial Accounting Standards Board (“FASB”) issued “The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles,” which establishes the FASB Accounting Standards Codification (the “ASC”) as the
source of authoritative principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America (“GAAP”). This standard is effective for
financial statements issued for interim and annual periods ending after September 15, 2009.
Cash and cash equivalents – Cash consist of checking and money market accounts and certificates of
deposit with original maturities of one-year or less.
Property and Equipment – Real property and common areas are not recorded in the Association’s
financial statements because those properties are owned by the individual members in common and not
by the Association. The Association capitalizes personal property to which it has title at cost. Real
property not directly associated with the members is recognized as assets by the Association when it
has title to the property and either the asset can be disposed of by the Board of Governors or generates
significant cash flows from members or nonmembers on the basis of usage. Property and equipment
are recorded at cost. Depreciation is provided over the estimated useful lives of the assets using the
straight line and accelerated methods as follows:
Estimated Useful Lives
Information center 7 – 39 Years
Office equipment 5 Years
Use of estimates – The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and
assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at September 30, 2011 and 2010 and revenues and expenses during the years then
ended. The actual outcome of the estimates could differ from the estimates made in the preparation of
the financial statements.
Replacement Fund – Gables Estates Club, Inc. has no common areas for its members’ enjoyment; it is
a homeowner’s association only. Therefore, no separate reserve fund has been established.
6
Gables Estates Club, Inc.
Notes to Financial Statements
Years Ended September 30, 2011 and 2010
NOTE 3 – DELINQUENT DUES RECEIVABLE
The annual dues are payable on October 1
st
of each year. If not paid within 90 days, a delinquent notice is
sent to the owner and if still unpaid as of February 1
st
, a lien is placed against the property. Accrued
interest on delinquent accounts is not reflected on the financial statements until collected. The delinquent
dues as of September 30, 2011 and 2010 are $18,000 and $36,000, respectively. At September 30, 2011
and 2010, the allowance for doubtful accounts was $0 and $12,000, respectively.
Delinquent dues receivable are recorded at the stated amount of the transaction with the Club’s members.
The allowance for doubtful accounts is the Club’s best estimate of the probable losses in the Club’s
existing delinquent dues receivable. Past due balances over 120 days were reviewed individually for
collectability and the reserve was established accordingly. Account balances are charged off against the
allowance after all means of collection have been exhausted and the potential for recovery is considered
remote.
NOTE 4 – CASH AND CASH EQUIVALENTS
The Association had various accounts in financial institutions that are insured by the FDIC. The
amounts exceeding federally insured limits as of September 30, 2011 and 2010 were approximately
$248,000 and $107,500 respectively.
NOTE 5 – INCOME TAXES
The Association is subject to filing federal and state income tax returns. A homeowners’ association
may elect to be taxed as a regular corporation or as a homeowners’ association, depending on which
method results in a lower tax. If the Association elects to be taxed as a regular corporation, the excess
of revenues from members over related expenditures is subject to taxation, unless excess is returned
to the unit owners or is applied to the following year’s assessment. If the Association elects to be
taxed as a homeowners’ association, it is taxed on non-membership income, such as interest income.
For the year ended September 30, 2011, Gables Estates Club, Inc. elected to be taxed as a regular
corporation and file Form 1120. For the year ended September 30, 2010, Gables Estates Club, Inc.
elected to be treated as a homeowners’ association.
The Club adopted FASB ASC Topic 740, effective January 1, 2009, which clarifies the
accounting for uncertainty in income taxes by defining the criterion an individual tax position
must meet for any part of the benefit of the tax position to be recognized in financial statements
prepared in conformity with generally accepted accounting principles. The Club may recognize
the tax benefit from an uncertain tax position only if it is more likely than not the tax position will
be sustained on examination by the taxing authorities, based solely on the technical merits of the
tax position. The tax benefits recognized in the financial statements from such a tax position
should be measured based on the largest benefit having a greater than 50% likelihood being
7
Gables Estates Club, Inc.
Notes to Financial Statements
Years Ended September 30, 2011 and 2010
NOTE 5 – INCOME TAXES (Continued)
realized upon ultimate settlement with the tax authority. Additionally, Topic 740 provides
guidance on measurement, de-recognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition. In accordance with the disclosure requirements, the
Club’s policy on income statement classification of interest and penalties related to income tax
obligations is to include such items as part of total interest expense and other expense,
respectively. At September 30, 2011, the Club did not have any uncertain tax positions and thus
has not recognized any interest or penalties in these financial statements. Tax years that remain
subject to examination by federal authorities are 2008, 2009 and 2010.
NOTE 6 – STATEMENT OF CASH FLOW SUPPLEMENTAL DISCLOSURE
Cash paid for interest and income taxes for the years ended September 30, 2011 and 2010 are as
follows:
2011 2010
Interest $ 0 $ 0
===== =====
Income taxes $ 0 $ 1,926
===== =====
NOTE 7 – SUBSEQUENT EVENT
The Company has evaluated subsequent events through October 24, 2011, which is the date the
financial statements were available to be issued.
Supplementary Schedules
REVENUES: Actual Budget Variance
Annual dues $ 1 ,158 , 000 $ 1,158,000 $ -
Application/Transfer fees 4 10,000 2 70,000 1 40,000
Interest on investments 1 2,679 1 6,000 (3,321)
Architectural fees 2 0,400 2 3,437 (3,037)
Landscaping income 1 8,315 1 9,704 (1,389)
Miscellaneous income 6 ,907 2 50 6 ,657
Interest on fees 5 ,855 2 ,500 3 ,355
TOTAL REVENUES 1 ,632,156 1 ,489,891 1 42,265
EXPENSES:
Architectural fees 9 ,030 1 2,500 (3,470)
Awards and gift baskets 2 ,130 2 ,000 1 30
Bad debts – 1 2,000 (12,000)
Capital improvements – Cameras 4 ,648 3 ,500 1 ,148
Capital improvements – Hedge 1 7,732 2 0,000 (2,268)
Capital improvements – Landscape lighting 9 61 1 ,500 (539)
Capital improvements – Road 3 67,403 – 3 67,403
Capital improvements – Sign 1 6,154 – 1 6,154
Children’s club expenses 3 ,536 5 ,500 (1,964)
Contract services – 1 ,000 (1,000)
Credit reports 1 1,114 8 ,000 3 ,114
Depreciation 5 ,706 – 5 ,706
Directory – 2 ,500 (2,500)
Pension expense (administrator) 6 ,823 6 ,824 (1)
Equipment maintenance – Beam 1 ,342 3 ,500 (2,158)
Equipment maintenance – Camera 1 0,861 9 ,000 1 ,861
Equipment maintenance – Traffic control 2 ,785 6 ,000 (3,215)
Guard expense – 2nd site supervisor expense 1 ,260 1 ,260 -
Guard expense – Air and sea davit – 1 ,200 (1,200)
Guard expense – Awards – 3 00 (300)
Guard expense – DSL camera line 1 2,464 1 1,000 1 ,464
Guard expense – MTO expense – 2 ,000 (2,000)
Guard expense – Service and devices 6 49,808 6 67,732 (17,924)
Guard expense – Site supervisor expense 1 ,260 1 ,260 -
Holiday bonus 1 4,348 1 8,017 (3,669)
Information center – FPL 1 3,137 2 2,000 (8,863)
Information center – Supplies 3 ,723 3 ,500 2 23
Information center – Water and sewer 2 ,532 6 ,000 (3,468)
Insurance 1 3,626 1 6,000 (2,374)
Landscaping – Caretaker pension 2 ,911 2 ,881 3 0
Landscaping – Caretaker salary 2 7,186 2 8,806 (1,620)
Landscaping – Enhancement 2 5,384 – 2 5,384
Landscaping – Fertilization 9 ,775 7 ,800 1 ,975
Landscaping – Maintenance 8 9,118 8 9,000 1 18
Landscaping – Planning replacement – 8 ,000 (8,000)
Landscaping – Sprinkler system 2 45 1 ,500 (1,255)
Landscaping – Supplies, gas and oil 3 ,887 6 ,000 (2,113)
Landscaping – Tree trimming 4 ,860 2 ,500 2 ,360
Legal 1 6,208 2 5,000 (8,792)
Maintenance and repairs 1 ,200 – 1 ,200
Meeting 5 ,800 6 ,500 (700)
Miscellaneous 8 22 8 ,000 (7,178)
Office – storage 1 ,378 1 ,500 (122)
Office – supplies 5 ,727 4 ,500 1 ,227
Pest control 6 ,400 1 ,200 5 ,200
Postage and printing 1 ,831 2 ,500 (669)
Professional fees 1 0,663 1 2,600 (1,937)
Promotional expense 1 4,780 1 4,800 (20)
Refund to members 1 00,000 1 00,000 -
Salaries 6 8,235 6 8,235 -
Scanning equipment 8 ,346 1 2,000 (3,654)
Security police 5 4,207 4 6,800 7 ,407
Taxes and licenses 7 ,779 8 ,000 (221)
Telephone 2,188 2 ,600 (412)
Website 5 70 6 00 (30)
Yacht club expenses 8 08 2 ,000 (1,192)
TOTAL EXPENSES 1,642,691 1,307,415 335,276
EXCESS OF REVENUES OVER EXPENSES $ (10,535) $ 182,476 $ (193,011)
Gables Estates Club, Inc.
Schedule of Revenues and Expenses – Budget vs Actual
Year Ended September 30, 2011
See auditor’s report 9
