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FERREIRA CONSTRUCTION COMPANY INC., AND SUBSIDIARY
<br />NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<br />On December 21, 2020, the Company settled this claim for $1,950,000 which resulted in recording a
<br />loss on settlement of the claim in the amount of $5,468,820. The bond escrow on the balance sheet of
<br />$1,049,500 is an asset the Company was assigned in the settlement of the claim, which is expected to be
<br />collected within one year.
<br />Note 20 - Contribution of Subsidiary:
<br />On April 1, 2020, the shareholder of the Company contributed 100% of the ownership interests of
<br />Ferreira Power West, LLC — which then became a wholly owned subsidiary of the Company. The Company
<br />applied the guidance from ASC 805-50 since both entities are under common control. The net assets
<br />contributed were as follows:
<br />Cash $ 39,745
<br />Other current assets 3,807,006
<br />Current assets 3,846,751
<br />Property and equipment, net 1,971,728
<br />Total assets $ 5,818,479
<br />Long term debt, current maturities 367,530
<br />Other current liabilities 1,372,217
<br />1,739,747
<br />Lines of credit 1,438,577
<br />Long term debt, less current maturities 1,316,260
<br />2,754,837
<br />Total liabilities 4,494,584
<br />Member equity 1,323,895
<br />Total liabilities and equity $ 5,818,479
<br />A reconciliation of opening equity under ASC 805-50 is as follows:
<br />Retained earnings, December 31, 2019 $ 32,032,992
<br />Consolidation of related party subsidiary 1,323,895
<br />Consolidated retained earnings, December 31, 2019, as adjusted $ 33,356,887
<br />Total consolidated cash as of the beginning of the year of $708,981 includes $39,745 of cash from the
<br />related party subsidiary.
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