AUDITED FINANCIAL STATEMENTS

| June 5, 2016

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AUDITED FINANCIAL STATEMENTS

AND

OTHER INFORMATION

Years ended June 30, 2010 and 2009

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WAMC

TABLE OF CONTENTS

Page

Independent Auditor’s Report

1

Financial Statements

Statements of Financial Position

2

Statements of Activities

3

Statements of Cash Flows

4

Notes to Financial Statements

5-11

Other Information

Schedule of Other Support and Revenue

12

Schedule of Functional Expenses

13

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INDEPENDENT AUDITOR’S REPORT

To the Board of Directors

WAMC

We have audited the accompanying statements of financial position of WAMC (a nonprofit public telecommunications entity) as of June 30, 2010 and 2009, and the related statements of activities, and cash flows, for the years then ended. These financial statements are the responsibility of WAMC’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 audit 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 WAMC as of June 30, 2010 and 2009, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The Schedules of Other Support and Revenue and Functional Expenses is presented for purposes of 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 audits 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.

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Albany, New York

September 7, 2010

UHYLLP is an independent member of Urbach Hacker Young International Limited

WAMC

STATEMENTS OF FINANCIAL POSITION

June 30, 2010 and 2009

2010

2009

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

636,006

$

605,391

Pledges receivable

109,414

56,102

Underwriting and other receivables

422,463

472,157

Other current assets

51,083

93,708

Total current assets

1,218,966

1,227,358

NET PROPERTY AND EQUIPMENT

6,053,205

6,195,818

INVESTMENTS

739,244

777,202

$

8,011,415

$

8,200,378

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES

Line of credit borrowings

$

95,833

$

120,833

Current maturities of long-term debt

332,897

297,941

Accounts payable

227,852

92,680

Accrued compensation

219,537

333,532

Deferred revenue

302,252

309,791

Other current liabilities

248,187

272,019

Total current liabilities

1,426,558

1,426,796

LONG-TERM DEBT, net of current maturities

2,137,841

2,463,159

NET ASSETS

Unrestricted net assets

4,447,016

4,310,423

$

8,011,415

$

8,200,378

See notes to financial statements.

Page 2

WAMC

STATEMENTS OF ACTIVITIES

Years Ended June 30, 2010 and 2009

REVENUE AND OTHER SUPPORT

2010

2009

Programming:

$ 2,530,555

Member fund drives

$ 2,760,046

Grants:

491,888

Corporation for Public Broadcasting

463,452

New York State Education Department

82,387

80,380

Programming and other grants

200,662

296,514

Total grants

774,937

840,346

Other revenues:

2,475,904

Underwriting

2,485,043

Performing arts studio

210,733

158,662

Other support and revenue

379,867

246,280

Total revenue and other support

6,371,996

6,490,377

EXPENSES

Program services:

3,118,416

Programming and production

3,085,569

Broadcasting

1,063,359

1,116,316

Program information

19,141

11,191

Total program services

4,200,916

4,213,076

Supporting services:

1,316,018

Fund raising

1,388,068

Management and general

785,566

828,692

Total supporting services

2,101,584

2,216,760

Total expenses

6,302,500

6,429,836

CHANGE IN NET ASSETS BEFORE INVESTMENT

TRANSACTIONS

69,496

60,541

REALIZED AND UNREALIZED GAINS (LOSSES) ON

INVESTMENT TRANSACTIONS

67,097

(263,355)

CHANGE IN NET ASSETS

136,593

(202,814)

Net assets, beginning of year

4,310,423

4,513,237

Net assets, end of year

$ 4,447,016

$ 4,310,423

See notes to financial statements.

Page 3

WAMC

STATEMENTS OF CASH FLOWS

Years Ended June 30, 2010 and 2009

2010

2009

CASH FLOWS FROM OPERATING ACTIVITIES

Change in net assets

$

136,593

$

(202,814)

Adjustments to reconcile change in net assets to net cash

provided by operating activities:

Depreciation

363,389

397,180

Realized and unrealized (gains) losses on investment

(67,097)

transactions

263,355

Changes in:

Pledges receivable

(53,312)

(5,972)

Underwriting and other receivables

49,694

(14,338)

Other current assets

42,625

103,102

Accounts payable

135,172

(98,298)

Accrued compensation

(113,995)

(5,689)

Deferred revenue

(7,539)

118,224

Other currrent liabilities

(23,832)

21,510

Net cash provided by operating activities

461,698

576,260

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of investments

(608,888)

(300,323)

Proceeds from sale of investments

713,943

328,704

Acquisition/construction of property and equipment

(220,776)

(101,184)

Net cash used in investing activities

(115,721)

(72,803)

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of line of credit borrowings, net

(25,000)

(4,167)

Principal payments on long-term debt

(290,362)

(244,396)

Net cash used in financing activities

(315,362)

(248,563)

Increase in cash and cash equivalents

30,615

254,894

Cash and cash equivalents, beginning of year

605,391

350,497

Cash and cash equivalents, end of year

$

636,006

$

605,391

SUPPLEMENTAL DISCLOSURES OF CASH FLOW

INFORMATION

$

169,958

Cash payments for interest

$

189,043

See notes to financial statements.

Page 4

WAMC

NOTES TO FINANCIAL STATEMENTS

June 30, 2010 and 2009

NOTE 1: ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization – WAMC is a nonprofit public telecommunications entity, organized in 1981, withbroadcasting coverage in New York State and western New England. As a publicly supported radio station, WAMC receives substantially all of its support and revenue from listeners, underwriters, fees for the production of programming, and under various federal and state grants.

Basis of Accounting- WAMC’s financial statements are prepared in accordance with generallyaccepted accounting principles and the principles of accounting and financial reporting for public telecommunications entities issued by the Corporation for Public Broadcasting (CPB). Under CPB accounting principles, the statement of activities is intended to present functional type expenditure classifications, which reflect both program and supporting services. The specific program and supporting services functional classifications, as presented in the financial statements, are defined by CPB.

Financial Statement Presentation- The financial statements of WAMC follow generally acceptedaccounting principles which establish standards for financial reporting by not-for-profit organizations and require that resources be classified for accounting and reporting purposes into certain net asset categories according to externally (donor) imposed restrictions. Accordingly, when applicable, WAMC records contributions received as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/or nature of any donor restrictions.

Cash and Cash Equivalents- WAMC considers all highly liquid debt instruments (such as moneymarket accounts) to be cash equivalents. WAMC places its cash with high quality credit institutions. Cash balances, however, are generally in excess of FDIC insurance limits.

Receivables – Receivables, which are principally comprised of on-air acknowledgements of corporateunderwriting, are periodically evaluated by management for collectibility. Management has elected to record bad debt expense using the direct write-off method. At such time as underwriting and other receivables are determined to be uncollectible, such amounts are written-off to bad debts. Generally accepted accounting principles require that the allowance method be used to reflect bad debt expense. However, the effect of the use of the direct write-off method is not materially different from the results that would have been obtained had the allowance method been followed. Pledges receivable, as more fully disclosed under Note 2, principally arise from member fund drives. When applicable, multi-year pledges are stated at fair value, using the present value of estimated future cash flows discounted at an appropriate rate.

Other Current Assets- Other current assets are principally comprised of amounts paid to National Public Radio and other program producers (for programming to be provided subsequent to the end of the fiscal year) and certain prepaid insurance costs.

Property and Equipment- As more fully disclosed under Note 3, property and equipment, includingbroadcast licenses acquired through the acquisition of property and equipment, is recorded at cost or, if donated, at fair value determined at date of acquisition. The carrying amounts of assets, and the related accumulated depreciation, are removed from the accounts at the time of asset disposition. Depreciation of property and equipment is computed utilizing the straight-line method over the estimated useful lives of the assets, ranging from 5 to 40 years. Maintenance costs and repairs are charged to expense as incurred.

Investments –Investments in marketable securities are reported at fair value. Fair value is the price thatwould be received to sell an asset in an orderly transaction between market participants at the measurement date. Realized and unrealized gains and losses are included in the change in net assets for the year.

Page 5

WAMC

NOTES TO FINANCIAL STATEMENTS

June 30, 2010 and 2009

NOTE 1: ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES(Continued)

Investments (Continued) -Interest, dividends and other investment income are included in theStatements of Activities as a component of other support and revenue.

Accrued Compensation- The liability account “accrued compensation” includes salaries and related benefit costs earned by employees, but not yet paid, as of WAMC’s year end.

Barter Transactions- WAMC provides certain broadcast services (principally underwriting) in exchange for certain vendor equipment, merchandise and services. The estimated fair value of the vendor equipment, merchandise or services received and the corresponding obligation to provide broadcast services are both recorded in the financial statements. Deferred barter costs are expensed or capitalized as they are used, consumed or received. Deferred barter revenue, a component of deferred revenue in the Statements of Financial Position, is recognized as the related underwriting is aired.

Revenue and Other Support- WAMC receives substantially all of its support and revenue fromlisteners, underwriters, through the production of programming, and under various federal and state grants. Member contributions, grants, production of programming and underwriting revenues are recorded as revenue in the period earned.

Rental Property Activities- WAMC owns certain commercial rental property in Albany, New York. Forfinancial statement reporting purposes, the Statements of Activities reflect rental property income (a component of other support and revenue) net of related rental expense. Rental property income approximated $106,100 and $106,600 for the years ended June 30, 2010 and 2009, respectively. Rental property expenses, inclusive of depreciation expense, approximated $65,800 and $63,700 for the years ended June 30, 2010 and 2009, respectively. Future minimum rental revenue to be received under short and long-term leases is expected to approximate $53,000 in 2011, $36,000 in 2012, $27,000 in 2013 and $3,600 in 2014.

Income Taxes- WAMC is exempt from income taxes under Section 501-c (3) of the Internal RevenueCode. Effective July 1, 2009, WAMC adopted certain new guidance regarding accounting for uncertainty in income taxes. The income tax positions taken by WAMC for any years open under the various statutes of limitations are that WAMC continues to be exempt from income taxes and that WAMC earns revenues from certain activities which are considered unrelated business income under the Internal Revenue Code. In both 2010 and 2009, however, unrelated business income (net of applicable expenses) resulted in no tax expense. The adoption of this guidance did not impact WAMC’s financial position or results of operations. WAMC believes that there are no other tax positions taken or expected to be taken that would significantly increase or decrease unrecognized tax benefits within 12 months of the reporting date. None of WAMC’s federal or state income tax returns is currently under examination by the Internal Revenue Service (IRS) or state authorities. However fiscal years 2007 and later remain subject to examination by the IRS and various state authorities.

Estimates and Assumptions- The preparation of financial statements in conformity with generallyaccepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues

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