SCOPE OF SERVICE I examined all entries in the general records and examined all items of interest to ascertain if all coupons had been clipped and accounted for. I have reconciled the bank balance as shown on the books of the corporation with the amount shown on the bank statement at June 30, 1927, and further verified the balance as shown on the bank statement by a certificate direct from the depository. I have not checked the securities which are kept in safety deposit boxes at the Fletcher American National Bank at June 30, 1927, by actual count. All securities were checked by actual count at March 31, 1927, and found to be in agreement with the records of the corporation at that time. I have checked all postings to the general ledger and made such analyses as were necessary for the preparation of this report. Following is a comparative balance sheet at June 30, 1927, and July 1, 1926, showing the increase or decrease in the various accounts: A reconciliation of the increase in securities of $585,000, with the increase in the capital account of $588,085.90 follows: This item represents unamortized premium on securities purchased. The premiums paid on securities are amortized over the life of the bonds at coupon clipping periods and the amount of the amortization is available for reinvestment only, as bond premium is a part of the original capital and the difference between the rate of interest and the yield is reinvested in securities. Accrued interest purchased- $258.51 This represents accrued interest on securities at the time of purchase and is deducted from the interest received when the first coupons are clipped. The amount collected is available for purchases of additional securities only, as it is a part of the original capital. At June 30, 1927, there were two amounts of accrued interest purchased but not collected as shown on Schedule No. 1 of this report. Notes receivable_. $2,350.00 This amount is made up of one note as follows: Howard Gardner Post No. 281, Tyrone, Pa., maturity, July 15, 1935; rate, 6 per cent; amount, $2,350. Interest payable on January 15 and July 15 of each year. Cash in bank__. $7,955. 27 The cash in bank at June 30, 1927, represents funds for reinvestment and is not available for distribution as it is made up of purchased interest collected and other interest representing amortization of premiums. Discount on bonds.. $2,932. 66 This represents unamortized discount on certain securities purchased as shown in detail on Schedule No. 1 of this report. The discount is being amortized in the same manner as premiums but will not be available for distribution until the maturity of the bonds on which the discount appears. Unrealized earnings. $229.84 This amount represents the amortized portion of original discount on securities and is reflected on the books of the corporation as unrealized earnings until the maturity of the bonds upon which the discount appears. When these bonds mature the discount earnings will become realized and available for distribution. I have examined the vouchers at national headquarters representing disbursements of funds for rehabilitation and child-welfare work and in my opinion the funds have been properly disbursed. The records of the corporation are well kept and appear to reflect properly all transactions and the records at national headquarters for expenditures made of fund earnings transferred are kept in great detail and are checked against the original vouchers which are duplicates of checks issued. I trust that this report furn'shes you with the desired information. I hereby certify that I have audited the books of account of the American Legion Endowment Corporation, Indianapolis, Ind., for the 12 months ended June 30, 1927, and have prepared the above balance sheet as reflecting the financial condition of the corporation at June 30, 1927. GEO. S. OLIVE, C. P. A., Member American Institute of Accountants. |