1
EXHIBIT 99.1
[ANDREW V. SCHNURR & CO. LETTERHEAD]
November 20, 1996
Partners
Oak Run Manor
100 Huguenot Avenue
Englewood, NJ 07631
Gentlemen:
In accordance with the terms of our engagement, we have made an
examination of the accounts and records of Oak Run Manor for the twelve month
period ended December 31, 1995. Our examination was made in accordance with
generally accepted auditing standards and, except as explained in the following
paragraphs, it included such other auditing procedures as we considered
necessary in the circumstances.
Cash:
Written confirmation of the bank balances of $131,641. was not
obtained directly from the depository bank as of December 31, 1995. The
balances shown on the depository's statements were reconciled with the balances
shown by the books.
Cash on hand held in the project's on-site office, in amount of
$1,600.00, was not confirmed but was in agreement with management's control.
Property and Equipment:
Depreciation lapse schedules are maintained to show changes in the
assets and related depreciation allowances account since date of acquisition.
Depreciation has been computed at the maximum allowed by the Treasury
Department.
2
(2)
Liabilities:
A listing of vouchers payable was prepared as of December 31, 1995. We
examined vendor's invoices paid subsequent to December 31, 1995 and prior to
completion of our field work and any unpaid invoices on hand to determine that
all significant liabilities were included in the listing.
We checked the company's liability as of December 31, 1995 for payroll
taxes withheld and accrued.
In our opinion, subject to the aforesaid comments, the accompanying
balance sheet and related statement of profit and loss presents fairly the
financial position of Oak Run Manor as of December 31, 1995, in conformity with
generally accepted accounting principles.
/s/ ANDREW V. SCHNURR
----------------------------
Andrew V. Schnurr
ANDREW V. SCHNURR & CO.
3
OAK RUN MANOR
BALANCE SHEET
AS OF DECEMBER 31, 1995
ASSETS
CURRENT ASSETS
Cash in Bank and on Hand $ 110,156.
Cash in Bank - Security Account 23,085.
Security Deposits 2,370.
Prepaid Expenses 7,500.
----------
TOTAL CURRENT ASSETS $ 143,111.
FIXED ASSETS
Land 328,000.
Buildings 2,952,175.
----------
Total 3,280,175.
Less: Reserve for Depreciation 621,698.
----------
TOTAL FIXED ASSETS 2,658,477.
-----------
TOTAL ASSETS 2,801,588.
-----------
LIABILITIES
CURRENT LIABILITIES
Accounts Payable $ 129,414.
Tenants Prepaid Rents 6,650.
Tenants Security Deposits Held 23,085.
----------
TOTAL CURRENT LIABILITIES 159,149.
PARTNERS CAPITAL ACCOUNT
Balance, January 1, 1995 2,763,843.
Add: Net Profit for Period 154,596.
----------
Total 2,918,439.
Deduct: Returns of Capital 276,000.
----------
TOTAL PARTNERS CAPITAL ACCOUNT 2,642,439.
-----------
TOTAL LIABILITIES $ 2,801,588.
-----------
ANDREW V. SCHNURR & CO.
4
OAK RUN MANOR
STATEMENT OF PROFIT AND LOSS
FOR THE 12 MONTH PERIOD ENDING DECEMBER 31, 1995
INCOME
Rental Income $879,170.
Interest Income, Late Charges, Etc. 2,758.
--------
TOTAL INCOME $881,928.
EXPENSES
Advertising $ 18,908.
Office Expenses 14,461.
Management Fees 42,267.
Legal & Accounting 4,645.
Telephone 3,373.
Janitor Payroll 81,571.
Electric 9,189.
Water & Sewer 53,331.
Exterminating 1,018.
Hospitalization 3,828.
Repairs - Materials 170,852.
Decorating Supplies & Contracts 33,916.
Provision for Depreciation 107,341.
Taxes - Real Estate 128,756.
- Payroll 10,181.
Insurance - Hazard 20,602.
Gardening 22,802.
Bank Charges 291.
---------
TOTAL EXPENSES 727,332.
--------
NET PROFIT $154,596.
--------
ANDREW V. SCHNURR & CO.
5
OAK RUN MANOR
STATEMENT OF CASH FLOW 12 MONTH PERIOD
ENDED DECEMBER 31, 1995
OPERATING ACTIVITIES
Net Income $154,596.
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and Amortization $107,341.
Changes in Operating Assets & Liabilities:
Decrease in Accounts Receivable 1,243.
Increase in Prepaid Expenses (3,090.)
Increase in Accounts payable &
Accrued Expenses 33,813.
Decrease in Tenants Security Deposit (1,120.)
Decrease in Prepaid Rents (200.) 137,987.
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 292,583.
FINANCING ACTIVITIES
Distributions to Partners (276,000.)
--------
INCREASE IN CASH AND CASH EQUIVALENTS 16,583.
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 116,658.
--------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $133,241.
========
ANDREW V. SCHNURR & CO.