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. OLKAWAHA FARMS, INC. <br /> NOTES TO FINANCIAL STATEMMNTS <br /> DECEMBER 31 , 2002 <br /> f <br /> ' 1 - Or anization and Nature of Business : <br /> Note g <br /> ' Oklawaha Farms, Inc. (the "Company" was incorporated under the laws of the State of Florida on <br /> August 20, 1987 , The Company is engaged in the business of land and environmental restoration <br /> ' projects for the commercial and government industries . <br /> Note 2 - Summary of Significant Accounting Policies , <br /> The more significant accounting policies of the Company are summarized below : <br /> Basis of Accounting — The Company uses the accrual method of accounting. <br /> Receivables — No provision has been made for uncollectible accounts as of the balance sheet date; <br /> Management considers all accounts to be collectible in accordance with standard terms of payment. <br /> Method of profit recognition — Revenues from fixed price contracts are recognized by the percentage <br /> of completion method, based on the ratio of costs incurred to total estimated contract costs . Contract <br /> costs include all direct material and labor costs and those indirect costs related to contract <br /> performance. Selling, general and administrative costs are charged to expense as incurred. <br /> Provisions for estimated losses on uncompleted contracts are made in the period in which such losses <br /> are determined . Changes in job performance, job conditions, and estimated profitability and final <br /> contract settlements may result in revisions to costs and income, and are recognized in the period in <br /> which the revisions are determined . <br /> Costs and estimated earnings in excess of billings on uncompleted contracts — The assets represents <br /> revenues in excess of amounts billed . The liability represents billings in excess of revenues earned . <br /> ' Property and depreciation — Property and equipment are stated at cost . Depreciation is computed <br /> using the " straight-line" depreciation method over the estimated useful life of the related asset. <br /> Useful life ranges from five to thirty-nine years . <br /> Income Taxes — The Company has elected, with approval from its shareholders, to be an "S " <br /> corporation for Federal income tax purpose. There is no provision for Federal income taxes included <br /> in the accompanying statement of operations related to the operations of the Company due to its tax <br /> status as an "S " corporation. <br /> See Accountants' Review Report. <br /> ' 9 <br />