Key Royal Financial Statement December 31 2008

KEY ROYAL CONDOMJNTUM ASSOCIATION, INC.

FINANCIAL STATEMENTS

A

DECEMBER 31, 2008

DENNIS H.

COOK

Certined Public Accountant

1000 Babcimn ROAD SOUTH, SUITE 2 LARGO, FLORIDA 33771 (727) 530-0402 FAX

(727) 536-1761

INDEPENDENT AUDITORS REPORT

March 6, 2009

To The Board of Directors Key Royal CondominiumAssociation, Inc. _

Naples, Florida

I

have

audited

the

accompanying balance

December 31, 2008 and the related

sheet

of

Key

Royal

Condominium Association, Inc.,

balances and statement of cash flows for the year ended December 31, 2008.

the representation of the company

as

of

statements of assessments, revenues and expenditures, changes in fund

031s management.

My responsibility

These financial statements are

is to express an opinion on these

Enancial statements based on my audit.

I perfumed rny audit in accordance with generally accepted auditing standards America.

in the United States

of

Those standards require perfonnauce of auditing procedures to obtain reasonable assurance as to

whether the financial statements are free of material misstatement. examining, on

statements.

a

test basis,

evidence supporting the

amounts

Auditing procedtnes consist primarily of

and disclosures included in the iinancial

Those procedures also include an assessment of the accounting principles used and signiiicant

estimates made by management and an evaluation of the overall Huancial statement presentation.

I believe

that the results of my procedures provide a reasonable basis for my opinion presented below.

In my opinion, the Enancial statements referred to above present iairly, in all material respects, the iinancial position of Key

Royal

Condominium Association, Inc.,

at December

31,

2008,

and the results

of

its

operations and changes in cash Hows for the period then ended, in conformity with generally accepted accounnng principles in the United States of America,

The supporting data included in the report have been

subjected to the same auditing procedures applied in the examination of the basic iinancial statemenm, and in my opinion, are presented fairly in all material respects in relation to the basic iinancial statements taken as a whole.

DennisH. Cook Certiied Public Accountant

KEY ROYAL CONDOMINIUIVIASSOCIATION, DIC.

BALANCE SHEET

DECEMBER 31, 2008

ASSETS

REQUIRED GENERAL

RESERVE

FUND

FUND

TOTAL

ASSETS

Cash inBank-Operating & CD A

A

031s

S

Cash in Savings Ergress Accounts Receivable-Owner

61,134

$

298,923

$

360,057

7,040

-

7,040

120,355

-

120,355

21,331

-

21,331

7 039

-

7.039

030s

(Less Allowance for Uncollectables) Prepaid Instuance

Equipment & Improvements (Net ofAccumulated Depreciation $3,849)

TOTAL ASSETS

S

216 899

S

298,923

$

515 822

LIABILITIESAND FUND BALANCES LIABILITIES Accotmts Payable-Trade

S

Accmed Wages

14,163

S

-

3,106

Prepaid Assessments

73,894

TOTAL LIABILITIES

S

-

3,106

__M__

91,163

14,163

E

024

91,163

CONTINGENCIES AND CO|S (Note 2)

FUND BALANCE

125,736

298,923

424 659

TOTAL LIABILITIES AND KIND BALANCES

S

216 899

S

298 923

S

515.822

THE ACCOIVIPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS

1

KEY ROYAL CONDOMINTUM ASSOCIATION, INC.

STATEMENTS OF ASSESSMENTS, REVENUES AND EXPENDITURES

AND CHANGES IN FUND BALANCES

JANUARY 1, 2007 T0 DECEMBER 31, 2008

REQUIRED GENERAL

RESERVE

FUND

FUND

TOTAL

ASSESSMENTS AND REVENUES: Maintenance Fees Assessed

$

Interest Income

A

677,864

S

113

146,500

S

4,802

824,364 4,915

Other Income-Utilitiesand Owner Fees

83,350

-

83,350

1VIisc. Income-Late Fees, Vending, Charge

14 467

-

14.467

TOTALS

775 794

151 302

927 096

EIGENDITURES: Bad Debts & Uncollected Assessment Cable TV Depreciation

1,501

-0-

1,501

43,999

-0-

4 3,999

2,151

-0-

2,151

13,340

-0-

13,340

113,209

-0-

113,209

5,950

-0-

5,950

Management Fees

20,895

-0-

20,895

Oliice, Printing,

19,438

-0-

19,438

5,903

-0-

Pool Maintenance, Gas & Repair Insurance Legal & Accounting

Postage & 1VI.isc.

Pest Control Repairs, Grounds Supplies & Janitorial

153,468

Salaries-Admin/Maint/Grounds

5,903

-0-

153,468

78,564

-0-

Property Taxes, Licenses 8: Permits

1,985

-0-

1,985

Telephone

7,572

-0-

7,572

Utilities & Trash

78,564

184,111

-0-

184,111

Fire Equipment Maintenance

31,160

-0-

31,160

Security-Service and Gate

33,525

-0-

33,525

3 796

-0-

3 796

Interest Expense-Insurance

TOTALS

720 567

-0-

720 567

030 Excess ornxpenaimes Over Revenues

55,227

FUND BALANCES, OPENING-1-1-08

FUND BALANCES, ENDING-12-31-08

151,302

70.509

$

125 736

206,529

147 621

S

298,923

218 130

S

424 659

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS

A

2

IGZY ROYAL CONDOMJNTUM ASSOCIATION, INC.

STATEMENT OF CASH FLOWS

FOR TEE PERIOD ENDED DECEMBER 31, 2008

Cash Flows From Operational Activities:

Cash Received From Unit Owners

$

742,475

Other158,017 Interest Income4,915

A

Cash Paid to Vendors and Employees

(

749,035)

Interest Paid

(

3 795)

Net Cash ProvidedFor Operating Activities

152,576

Cash Flows For Investing Activities: Purchase - Equipment

-

Cash Flows From Financing Activities: Decrease Loan Insurance

-

NET INCREASE IN CASH

152,576

CASH, BEGINNING OF YEAR

214 521

CASH, END OF YEAR

$

367 097

RECONCILIATION OF NET REVENUE (EXPENDITURES) TO NET CASH PROVIDED BY OPERATING ACTIVITIES:

Net Income$

206,529

Az§ustments to Reeoncile Net Expenditures; Depreciation2,151 Accounts Receivable

"

(

Prepaid Expenses & Depusixs

85,143)

40,153

Accounts Payable(

17,695)

Accrued Expenses1,826 Prepaid Assessments

4 755

Total Acbustments

(

NET CASH PROVIDED FOR OPERATING ACTIVITIES

$

53 953

152 576

T'HE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS

3

IGIY ROYAL CONDOMINTUM ASSOCIATION, INC.

NOTES T0 FINANCIAL STATEIVEZNTS

DECEMBER 31, 2008

NOTE 1:

SUIVHVIARY OF SIGNIFICANT ACCOUNTDIG POLICIES

ORGANIZATION

024

The KEY ROYAL CONDOMINIUM ASSOCIATION, INC. was incorporated under the laws of the

State of Florida as a not-for

024prot`it corporation for the purpose of administering and operating

the

property located in Naples, Florida, in accordance with the terms of Florida Statue Chapter 718 ofthe Declaration of Condominiums.

Operations ofthe Association commenced effective as of May 1, 2004,

as a Condominium with 270 ¤mits..

ACCOUNTING POLICIES

024

The Association uses fund accounting, which requires that timds, such as operating funds and funds designed for i\mn·e major repairs and replacements, can be

reporting purposes. directors.

classified separately for accounting and

Disbursements for the operating fund are generally at the discretion ofthe board of

Disbursements from the replacement fund generally may be made only for designated

purposes.

The Association uses the direct write off method for nncollecdble maintenance fees and retains legal

cormsel to place liens on the unit owners whose assessments are in arrears.

The common owned assets purchased by the Association are capitalized in the Enancial statements at cost.

The personal property is depreciated over its estimated useful life using the straight-line method

of depreciation.

The Association is required to ile Federal and State Corporation income taxes as a regular corporation. The Association will tile the Form 1120-H on the cash basis of accounting, which ended with no tax

liability for the our-rent year.

ESTIMATES

024 The

preparation

of Enancial

statements

in

conformity

with

generally

accepted

accounting principals requires management to make estimates and assumptions that affect reported amormts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the

Iinancial statements and the reported amounts of revenues and expenses during the reportmg period. '

Actual results could dilfer lrom those estimates.

4

KEY ROYAL CONDOIVIINTUM ASSOCIATION, INC.

NOTES T0 FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2008

NOTE 2: REQU`HlED RESERVE FUND

Under Florida Statutes the Association is required to accumulate funds for ihtine maior repairs and replacements.

These fimds are to be segregated and held primarily in interest bearing accounts.

The future reserves are funded and based on the engineering stndy ofthe completed buildings.

The reserves to be lhnded for:

Exterior Reserves

Annually

Outside Painting "

S

Roof Replacement

87,400 39,600

Resurfacing-Pavement

6,000

Covered Carports

13,500

Total

S 146,500

The Exterior Reserves

Opening Balance 01-01-08

$ 147,621

Fundingand Interest

15 1,302

Charges

Ending Balance

-

12-31-08

$ 298 923

Total Reserves

$ 298,923

5

DENNIS H. COOK Certined Public Accountant

1000 Batcuaa Roan s0u·rz

024r, sums 2

LARGO, FLORIDA

33771

[727) 530-0402 Fax

INDEPENDENT AUDl

(727] 536-1761

031I'OR REPORT 031S

ON OTHER FINANCIAL INFORMATION

March 6, 2009

A

To nre Board ornamoa Key Royal CondominiumAssociation, Inc. Naples, Florida

The other financial infonnation on pages 6 through 9 is presented for pinpuses of additional analysis and is not a required part of the basic financial statements.

Such information, except for the portion marked

"imaudited", on whichl express no opinion, has been subjected to the auditing procedures applied in the andit of the basic financial statements, and, in our opinion, the information is fairly stated in all material

respects in relation to the basic financial statements takes as a whole.

The other financial information on the future manor repairs and replacements on the future major repairs and replacements on page 9 is not a required part of the basic financial statements but is other financial information required by the American Institute of Certified Public Accoimtants. limited procedures,

which consisted principally

of inquires

I have applied certain

of management regarding the methods of

measurement and presentation of the other financial infonnation.

However, I did not audit the information

and express no opinion on it.

Dennis H. Cook Cerntied Public Accountant

KEY ROYAL CONDOIVIINIUM ASSOCIATION, INC.

OTHER FINANCIAL INFORMATION ON FUTURE MAJOR REPAIRS AND REPLACEMENTS (UNAUDITED)

FOR 'THE PERIOD ENDED DECEMBER 31, 2008

The following information is based on the study conducted by the Developer and presents significant informanon about the componens of common property.

Estimaned Remaining Useful

Current

Lives

Replacement

( Y ears)

Costs

A Components

Components Estimated

OfFund 2008 Funding

B alance December 3 1,

Requirement

2008

Common Elements:

Roof

24

Paving

24

150,000

6,000

12,000

Painting

2

262,200

87,400

1 80,723

Carports

19

270 000

13 500

27 000

Total

A

S

990,000

$

$1 672,200

S

6

39,600

146 500

$

79,200

$ 298 923

KEY ROYAL CONDOMINIUM ASSOCIATION, HVC.

SCHEDULE OF CHANGES IN REPLACEMENT FUND BALANCE

FOR THE PERIOD ENDED DECEMBER 31, 2008

Beginning

COMPONENTS

Additions

Changes

Components

Fund

To

To

Of Ending

Balance

Fund

Frmd

Fund Balance

Common Elements:

Roof

A

_

Paving

$

39,600

$

39,600

S

~0-

8

79,200

6,000

6,000

-0-

12,000

Painting & Siding

88,521

92,202

-0-

180,723

Carports Covered

13.500

13,500

$ 147 621

$151,302

All Interest eamed was applied to the painting reserve account for 2008.

7

-0-

$

-0-

27 000

$298 923

KEY ROYAL CONDOMINTUM ASSOCIATION, INC.

SCHEDULE OF OPERATING FUND REVENUES AND ASSESSMENTS,

EXPENSES AND CAPITAL TRANSACTIONS

024 ACTUAL AND BUDGET

FOR THE YEAR ENDED DECEMBER 31, 2008

APPROVED ACTUAL

BUDGET

034AUDlTED"

"UNAUD1TED"

VARIANCE FAVORABLE { U NFAVORABLE

REVENUES AND ASSESSMENTS Maintenance Fee Assessment

$

Interest Other-Water Reimb., Misc.

A

Total Revenues & Assessments

824,364

$

4,915

824,364

S

-

-

4,915

97 817

88 840

8 977

927,096

913,204

13,892

EXPENSES Oflice Payroll & 'I`axes

38,996

46,980

7,984

Employees-Maint. Kc Taxes

39,568

55,980

16,412

Management Fees

20,895

25,920

AccountingFees

4,750

4,404

5,025

Legal Fees

1 200

7,200

6,000

105,409

140,484

35,075

(

346)

Maintenance & Operating Expenses Repairs, Pool Ec Carports

13,340

18,000

Security Service

23,544

24,000

General Maintenance, Repairs, Janitorial.

51,235

18,300

Pest Control Grormds·Contraot & Maintenance Entry Gate Fire Protection Ingress 8: Egress

4,660 456 (

32,935)

5,903

5,160

(

93 ,438

69,000

(

743)

9,981

4,800

(

5,181)

3 1,160

6,900

(

24,260)

24,438)

8,795

3,504

(

5,291)

237,396

149,664

(

87,732)

1,985

1,200

Taxes, Licenses & Fees

Other Taxes Florida Condo Fees A

1

-

-

1,985

1,200

( ( (

785) -

)

785)

Utilities Electric Water & Sewer Telephone Trash Cable TV

24,670

36,000

1 10,274

93,840

7,572

9,300

1,728

49,167

52,800

3,633

43,999

50 688

6 689

235,682

242,628

6,946

8

11,330 (

16,434)

IGSY ROYAL CONDOIVIINIUM ASSOCIATION, INC.

SCHEDULE OF OPERATING FUND REVENUES AND ASSESSMENTS,

EXPENSES AND CAPITAL TRANSACTIONS

024 ACTUAL AND BUDGET (continued)

FOR THE YEAR ENDED DECEIVEBER 31, 2008

APPROVED

VARIANCE

BUDGET

FAVORABLE

"UNAUDITE.D"

U N FAVORABLE

ACTUAL "AUD1

035l'ED"

Administration Otlice Expense M.isc. Administration

A

__

Bad Debts

10,986

9,300

(

1,686)

8,452

4,800

(

3,652)

1 501

14 700

13.199

20,939

28,800

7,861

117 005

203 928

718,416

766,704

48,288

146,500

62,180

Insurance Property, Liability & Interest

86 923

Total Expenses (Excluding Depreciation)

EXCESS OF EXPENSES OVER REVENUES AND ASSESSMENTS (ExcludingDepreciation)

208,680

CAPITAL TRANSACTIONS Reserves Frmded

146,500

(

146 500)

-0-

EXCESS OF EXPENSES OVER ·

REVENUES AND ASSESSMENTS (Excluding Depreciation) AND CAPITAL TRANSACTIONS

S

62,180

$

9

-0-

$

62.180