INDEPENDENT AUDITOR'S REPORT
To the Partners of
APT Housing Partners Limited Partnership
Woburn, Massachusetts
We have audited the accompanying balance sheets of APT Housing Partners
Limited Partnership (a Massachusetts Limited Partnership) as of December
31, 1996 and 1995, and the related statements of income, partners' capital
(deficiency), and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based
on our audits. We did not audit the financial statements of Ashland
Commons Associates and Rockledge Apartments Associates("Local Limited
Partnerships"), the investments in which, as discussed in Note 3 to the
financial statements, are accounted for by the equity method of accounting.
The Partnership's cumulative share of losses of and distributions from the
Local Limited Partnerships have exceeded its investments therein.
Accordingly, the Partnership has reduced the investments to zero and has
suspended application of the equity method. The financial statements of
the Local Limited Partnerships were audited by other auditors
whose reports have been furnished to us, and our opinion, insofar as
it relates to the amounts included for the Local Limited Partnerships, is
based solely on the reports of the other auditors. The financial statements
of APT Housing Partners Limited Partnership for the year ended December 31,
1994, were audited by other auditors whose report dated February 18, 1995,
expressed an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. 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 and the
reports of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
1996 and 1995 financial statements referred to above present fairly, in all
material respects, the financial position of APT Housing Partners Limited
Partnership as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
<PAGE>
Our audits were made for the purpose of forming an opinion on the basic
1996 and 1995 financial statements taken as a whole. The supplemental
schedules listed in the accompanying index on page 15 are presented for
purposes of complying with the Securities and Exchange Commission's rules
and are not a required part of the basic financial statements. These
schedules have been subjected to the auditing procedures applied in the
audits of the basic financial statements. In our opinion, which insofar as
it relates to amounts included for the Local Limited Partnerships,
is based on the reports of other auditors, these schedules fairly state in
all material respects the financial data required to be set forth therein
in relation to the basic 1996 and 1995 financial statements taken as a whole.
Robert Ercolini & Company LLP
Boston, Massachusetts
March 19, 1997
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
REPORT ON FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1996
<PAGE>
CONTENTS
Page
Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Profit and Loss 5
Statement of Partners' Deficit 6
Statement of Cash Flows 7
Summary of Accounting Policies 9
Notes to Financial Statements 10
<PAGE>
February 4, 1997
To the Partners of
Ashland Commons Associates
Woburn, Massachusetts
We have audited the accompanying balance sheet of Ashland Commons Associates,
HUD Project No. 023-35279, (a limited partnership) as of December 31, 1996
and the related statements of profit and loss, partners' deficit and cash
flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. 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
audit provides 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 Ashland Commons
Associates as of December 31, 1996, and the results of its operations and
its cash flows for the year then ended in conformity with generally
accepted accounting principles.
Lloyd B. McManus, C.P.A., P.C.
Boston, Massachusetts
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
BALANCE SHEET
DECEMBER 31, 1996
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $300,024
Tenants: Accounts Receivable 3,059
Property Insurance 572
Mortgage Insurance 9,873
Total Current Assets 313,528
DEPOSITS HELD IN TRUST - FUNDED
Tenants' Security Deposits (Contra) 14,503
Total Deposits Held in Trust 14,503
RESTRICTED DEPOSITS AND FUNDED RESERVES
Mortgage Escrow Deposits 61,340
Reserve for Replacements 225,309
Residual Receipts 85,458
Total Deposits 372,107
FIXED ASSETS
Land 215,210
Building (Mortgaged) - Note 2 5,404,364
Less Accumulated Depreciation 2,695,603
2,923,971
OTHER ASSETS
Deferred Charges 98,341
$3,722,450
<PAGE>
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES
Accounts Payable $28,096
Accrued Interest Payable 46,314
Mortgage Payable - Current Portion 24,934
Rent Deferred Credits 1
Total Current Liabilities 99,345
DEPOSIT LIABILITIES
Tenants' Security Deposits (Contra) 13,912
Total Deposits Liabilities 13,912
LONG-TERM LIABILITIES
Mortgage Loan Payable - Note 2 4,738,829
Less: Current Portion 24,934
Total Long-Term Liabilities 4,713,895
Total Liabilities 4,827,152
COMMITMENTS AND CONTINGENCIES - NOTES 2,3, AND 4
PARTNERS' DEFICIT - Note 4:
General Partners (100,679)
Limited Partners (1,004,023)
Total Partners' Deficit (1,104,702)
$3,722,450
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED DECEMBER 31, 1996
REVENUES:
Rental income, less vacancies of $2,216 $1,230,592
Interest income 35,152
Miscellaneous income 2,333
Total revenues 1,268,077
COST OF OPERATIONS:
Repairs and maintenance $126,134
Salaries and wages 114,301
Real estate taxes 72,905
Management fee (Note 3) 48,516
Utilities 33,938
Administrative 32,102
Insurance 35,575
Payroll taxes 11,329
Depreciation and Amortization 206,104 680,904
Income before interest expenses 587,173
INTEREST EXPENSE, including MIP of $23,746 580,735
NET INCOME $6,438
Net Income to General Partners $290
Net Income to Limited Partners $6,148
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF PARTNERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1996
General Limited
Total Partner Partners
BALANCE, at December 31, 1995 $ (1,019,095) $ (96,827) $ (922,268)
Net income for the period 6,438 290 6,148
Distributions (92,045) (4,142) (87,903)
BALANCE, at December 31, 1996 $ (1,104,702) $ (100,679) $(1,004,023)
Percent of interest in profit
and losses 100% 4.5% 95.5%
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996
OPERATING ACTIVITIES:
Rental Income $ 1,230,899
Interest Income 35,152
Other Income 2,333
1,268,384
Administrative expenses 31,923
Management fee 48,177
Operating and maintenance expenses 168,840
Payrolls 124,064
Utilities 44,047
Real estate taxes and escrow deposits 73,619
Payroll taxes 11,329
Insurance 21,220
Interest on mortgage 557,206
Mortgage insurance premium 29,836
Tenant security deposits 591
1,110,852
Net cash provided by operating activities 157,532
INVESTING ACTIVITIES:
Increase in residual receipts fund (24,092)
Increase in reserve for replacements - net (39,870)
Net cash used by investing activities (63,962)
FINANCING ACTIVITIES:
Partners' distributions (92,045)
Mortgage principal payments (22,187)
Net cash used by financing activities (114,232)
Net decrease in cash (20,662)
CASH, at beginning of year 320,686
CASH, at end of year $ 300,024
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996
(Continued)
Cash Flows from Operating Activities:
Net income $ 6,438
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and Amortization 206,104
Changes in operating assets and liabilities:
Decrease in tenants' rents receivable 393
Decrease in prepaid expenses 9
Increase in tenants' security deposits (1,860)
Decrease in mortgage escrow deposits 7,173
Decrease in accounts payable and accrued expenses (61,908)
Increase in tenants' security deposits payable 1,269
Decrease in prepaid rents (86)
Net cash provided by operating activities $ 157,532
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
Financial Statements are prepared on the accrual basis and all development
and construction costs were capitalized. The partnership, for tax purposes,
charged to expense certain costs, such as interest and real estate taxes
during construction. Accordingly, the cost of property and equipment shown
in these statements includes $649,227 which has been deducted for tax
purposes.
The balance sheet does not give effect to any assets that the partners may
have outside their interest in the partnership, nor to any personal
obligations, including income taxes, of the individual partners.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. Depreciation of buildings is
based on a 25 year life using the straight-line method for financial
reporting purposes. For income tax purposes, accelerated depreciation
methods are used.
AMORTIZATION
Amortization of financing costs is based on a forty year life using the
straight-line method for both financial reporting and income tax purposes.
INCOME TAXES
The partnership, as an entity, is not subject to income tax. The partners'
share of the loss for tax purposes is includable in their income tax returns.
CASH AND CASH EQUIVALENTS
For purposes of statement of cash flows, the Partnership considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
Ashland Commons Associates is a Massachusetts limited partnership which was
formed on September 29, 1982 for the purpose of owning, rehabilitating and
operating a multi-unit apartment complex containing 96 residential units
under the provisions of Section 221 (d)(4) of the National Housing Act.
The partnership has a Section 8 contract with HUD to receive rent subsidy
equal to approximately 85% of the total rental income. This contract
expires September, 2002.
NOTE 2 - MORTGAGE LOAN PAYABLE
The mortgage note is insured by the Federal Housing Administration (FHA) and
is payable in monthly installments of approximately $48,283, including
interest at 11.728% per annum, through 2024. Annual principal payments
will average approximately $31,917 each year for the next five years.
The partnership is required to make monthly payments of $2,094 into a fund
for replacements. Withdrawals from this fund can only be made upon the
approval of the Federal Housing Commissioner.
Management believes it is not practical to estimate fair market value of
the mortgaged property because it is not determinable as to whether
financing with similar characteristics is currently available to the
partnership.
The partnership and its partners have no personal liability on the mortgage
loan; the mortgaged property is the only collateral for the loan.
NOTE 3 - RELATED PARTY TRANSACTIONS
The partnership pays a 4.5% management fee based on gross revenues
collected, which, at present, is capped at $43 PUPM, to an affiliate of a
general partner, and also $506 per month for bookkeeping. Further, the
management company is reimbursed at cost for salaries and wages and related
employee expenses such as payroll taxes, health insurance, disability
insurance, workers compensation and other insurance.
NOTE 4 - CAPITAL DISTRIBUTION RESTRICTION
No distribution of assets may be made except from "surplus cash" as defined
in the regulatory agreement with the Federal Housing Administration. Total
distributions are limited to $92,045 per annum as allowed by MHFA.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
REPORT ON FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1995
<PAGE>
CONTENTS
Page
Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Profit and Loss 5
Statement of Partners' Deficit 6
Statement of Cash Flows 7
Summary of Accounting Policies 9
Notes to Financial Statements 10
<PAGE>
January 20, 1996
To the Partners of
Ashland Commons Associates
Woburn, Massachusetts
We have audited the accompanying balance sheet of HUD Project No. 023-35279
of the Ashland Commons Associates (a limited partnership) as of December 31,
1995 and the related statements of profit and loss, partners' deficit and
cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. 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 audit provides 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 HUD Project No.
023-35279 as of December 31, 1995, and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.
Lloyd B. McManus, C.P.A., P.C.
Boston, Massachusetts
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
BALANCE SHEET
DECEMBER 31, 1995
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $320,686
Tenants: Accounts Receivable 3,452
Property Insurance 534
Mortgage Insurance 9,920
Total Current Assets 334,592
DEPOSITS HELD IN TRUST - FUNDED
Tenants' Security Deposits (Contra) 12,643
Total Deposits Held in Trust 12,643
RESTRICTED DEPOSITS AND FUNDED RESERVES
Mortgage Escrow Deposits 68,513
Reserve for Replacements 185,439
Residual Receipts 61,366
Total Deposits 315,318
FIXED ASSETS
Land 215,210
Building (Mortgaged) - Note 2 5,404,364
Less Accumulated Depreciation 2,494,407
3,125,167
OTHER ASSETS
Deferred Charges 103,249
$3,890,969
<PAGE>
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES
Accounts Payable $89,787
Accrued Interest Payable 46,531
Mortgage Payable - Current Portion 22,187
Rent Deferred Credits 87
Total Current Liabilities 158,592
DEPOSIT LIABILITIES
Tenants' Security Deposits (Contra) 12,643
Total Deposits Liabilities 12,643
LONG-TERM LIABILITIES
Mortgage Loan Payable - Note 2 4,761,016
Less: Current Portion 22,187
Total Long-Term Liabilities 4,738,829
Total Liabilities 4,910,064
COMMITMENTS AND CONTINGENCIES - NOTES 2,3, AND 4
PARTNERS' DEFICIT - Note 4:
General Partners (96,827)
Limited Partners (922,268)
Total Partners' Deficit (1,019,095)
$3,890,969
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED DECEMBER 31, 1995
REVENUES:
Rental income, less vacancies of $13,882 $1,218,926
Interest income 32,704
Miscellaneous income 2,289
Total revenues 1,253,919
COST OF OPERATIONS:
Repairs and maintenance $148,377
Salaries and wages 108,719
Real estate taxes 75,666
Management fee (Note 3) 48,177
Utilities 42,785
Administrative 30,978
Insurance 35,487
Payroll taxes 11,179
Depreciation and Amortization 206,104 707,472
Income before interest expenses 546,447
INTEREST EXPENSE, including MIP of $23,852 583,309
NET LOSS $(36,862)
Net Loss to General Partners $1,659
Net Loss to Limited Partners $35,203
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF PARTNERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1995
General Limited
Total Partner Partners
BALANCE, at December 31, 1994 $ (891,066) $ (91,066) $ (800,000)
Net loss for the period (36,862) (1,659) (35,203)
Distributions (91,167) (4,102) (87,065)
BALANCE, at December 31, 1995 $(1,019,095) $ (96,827) $ (922,268)
Percent of interest in profit
and losses 100% 4.5% 95.5%
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1995
OPERATING ACTIVITIES:
Rental Income $ 1,233,270
Interest Income 32,704
Other Income 2,289
1,268,263
Administrative expenses 30,847
Management fee 47,676
Operating and maintenance expenses 187,102
Payrolls 108,201
Utilities 33,702
Real estate taxes and escrow deposits 75,678
Payroll taxes 11,179
Insurance 40,132
Interest on mortgage 559,650
Mortgage insurance premium 23,769
Tenant security deposits (341)
1,117,595
Net cash provided by operating activities 150,668
INVESTING ACTIVITIES:
Increase in residual receipts fund (11,965)
Increase in reserve for replacements - net (22,245)
Net cash used by investing activities (34,210)
FINANCING ACTIVITIES:
Expenses not realted to project operations (878)
Partners' distributions (91,167)
Mortgage principal payments (19,743)
Net cash used by financing activities (111,788)
Net increase in cash and cash equivalents 4,670
CASH AND CASH EQUIVALENTS, at beginning of year 316,016
CASH AND CASH EQUIVALENTS, at end of year $ 320,686
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1995
(Continued)
Cash Flows from Operating Activities:
Net loss $ (36,862)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and Amortization 206,104
Expense not related to project operations 878
Changes in operating assets and liabilities:
Decrease in accounts receivable 14,612
Increase in tenants' rents receivable (323)
Decrease in prepaid expenses 25,100
Decrease in tenants' security deposits 1,155
Increase in mortgage escrow deposits (29,564)
Decrease in accounts payable and accrued
expenses (29,673)
Decrease in tenants' security deposits
payable (814)
Increase in prepaid rents 55
Net cash provided by operating activities $ 150,668
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
Financial Statements are prepared on the accrual basis and all development
and construction costs were capitalized. The partnership, for tax purposes,
charged to expense certain costs, such as interest and real estate taxes
during construction. Accordingly, the cost of property and equipment shown
in these statements includes $649,227 which has been deducted for tax
purposes.
The balance sheet does not give effect to any assets that the partners may
have outside their interest in the partnership, nor to any personal
obligations, including income taxes, of the individual partners.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. Depreciation of buildings is
based on a 25 year life using the straight-line method for financial
reporting purposes. For income tax purposes, accelerated depreciation
methods are used.
AMORTIZATION
Amortization of financing costs is based on a forty year life using the
straight-line method for both financial reporting and income tax purposes.
INCOME TAXES
The partnership, as an entity, is not subject to income tax. The partners'
share of the loss for tax purposes is includable in their income tax returns.
CASH AND CASH EQUIVALENTS
For purposes of statement of cash flows, the Partnership considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
Ashland Commons Associates is a Massachusetts limited partnership which was
formed on September 29, 1982 for the purpose of owning, rehabilitating and
operating a multi-unit apartment complex containing 96 residential units
under the provisions of Section 221 (d)(4) of the National Housing Act.
NOTE 2 - MORTGAGE LOAN PAYABLE
The mortgage note is insured by the Federal Housing Administration (FHA)
and is payable in monthly installments of approximately$48,283, including
interest at 11.728% per annum, through 2024. Annual principal payments will
average approximately $28,401 each year for the next five years.
The partnership is required to make monthly payments of $2,094 into a fund for
replacements. Withdrawals from this fund can only be made upon the approval
of the Federal Housing Commissioner.
The partnership and its partners have no personal liability on the mortgage
loan; the mortgaged property is the only collateral for the loan.
NOTE 3 - RELATED PARTY TRANSACTIONS
The partnership pays a 4.5% management fee based on gross revenues collected,
which, at present, is capped at $41.82 PUPM, to an affiliate of a general
partner, and also $506 per month for data processing. Further, the
management company is reimbursed at cost for salaries and wages adn related
employee expenses such as payroll taxes, health insurance, disability
insurance, workers compensation and other insurance.
NOTE 4 - CAPITAL DISTRIBUTION RESTRICTION
No distribution of assets may be made except from "surplus cash" as defined
in the regulatory agreement with the Federal Housing Adminstration. Total
distributions are limited to $92,045 per annum as allowed by MHFA.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
REPORT ON FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1994
<PAGE>
CONTENTS
Page
Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Profit and Loss 5
Statement of Partners' Deficit 7
Statement of Cash Flows 8
Summary of Accounting Policies 10
Notes to Financial Statements 11
<PAGE>
January 24, 1995
To the Partners of
Ashland Commons Associates
Woburn, Massachusetts
We have audited the accompanying balance sheet of HUD Project No. 023-35279
of the Ashland Commons Associates (a limited partnership) as of December 31,
1994 and the related statements of profit and loss, partners' deficit and
cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. 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
principals used and significant estimates made by management, as well as
evaluating the overall financial statements presentation. We believe that
our audit provides 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 HUD Project No.
023-35279 as of December 31, 1994, and the results of its operations and its
cash flow for the year then ended in conformity with generally accepted
accounting principles.
Lloyd B. McManus, C.P.A., P.C.
Boston, Massachusetts
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
BALANCE SHEET
DECEMBER 31, 1994
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $316,016
Tenants: Accounts Receivable 3,129
Accounts Receivable 14,612
Property Insurance 25,591
Mortgage Insurance 9,963
Total Current Assets 369,311
DEPOSITS HELD IN TRUST - FUNDED
Tenants' Security Deposits (Contra) 13,798
Total Deposits Held in Trust 13,798
RESTRICTED DEPOSITS AND FUNDED RESERVES
Mortgage Escrow Deposits 38,949
Reserve for Replacements 163,194
Residual Receipts 49,401
Total Deposits 251,544
FIXED ASSETS
Land 215,210
Building (Mortgaged) - Note 2 5,404,364
Less Accumulated Depreciation 2,293,211
3,326,363
OTHER ASSETS
Deferred Charges 108,157
$4,069,173
<PAGE>
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES
Accounts Payable (Note 4) $119,267
Accrued Interest Payable 46,724
Mortgage Payable - Current Portion 19,729
Rent Deferred Credits 32
Total Current Liabilities 185,752
DEPOSIT LIABILITIES
Tenants' Security Deposits (Contra) 13,457
Total Deposits Liabilities 13,457
LONG-TERM LIABILITIES
Mortgage Loan Payable - Note 2 4,780,759
Less: Current Portion 19,729
Total Long-Term Liabilities 4,761,030
Total Liabilities 4,960,239
COMMITMENTS AND CONTINGENCIES - NOTES 2,3, AND 5
Partners' Deficit - Note 5 (891,066)
$4,069,173
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED DECEMBER 31, 1994
REVENUES
Gross Potential Rental Income $1,249,771
Less Vacancies, Bad Debts, &
Section 236 Excess Rental Income Remitted 2,287
Effective Rental Income 1,247,484
Interest Subsidy 0
Other Income 22,909
Residual Receipts (Remitted) or Reimbursed 0
Total Income 1,270,393
OPERATING EXPENSES
Admininstration 140,158
Maint., Res. Services & Security 300,393
Utilities 35,022
Taxes (RE & Other) 68,122
Insurance 18,599
Depreciation & Amortization 206,110
Interest (Financing & Other) 576,555
Subtotal 1,344,959
Net Income or (Loss) for the Development
before Non-Operating Items ( 74,566)
Non-Operating Items [Gains or (Losses)] 0
Net Income or (Loss) for the Development ( 74,566)
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF PARTNERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1994
General Limited
Total Partner Partners
BALANCE, at December 31, 1993 $ (730,369) $ (83,835) $ (646,534)
Net loss for the period (74,566) (3,355) (71,211)
Distributions (86,131) (3,876) (82,255)
BALANCE, at December 31, 1994 $ (891,066) $ (91,066) $ (800,000)
Percent of interest in profit
and losses 100% 4.5% 95.5%
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1994
OPERATING ACTIVITIES:
Rental Income $ 1,231,577
Interest Income 22,203
Other Income 706
1,254,486
Administrative expenses 26,207
Management fee 48,180
Operating and maintenance expenses 188,454
Payrolls 96,368
Utilities 39,390
Real estate taxes and escrow deposits 72,728
Payroll taxes 4,094
Insurance 43,971
Interest on mortgage 561,825
Mortgage insurance premium 23,904
Tenant security deposits (1,334)
1,103,787
Net cash provided by operating activities 150,699
INVESTING ACTIVITIES:
Increase in residual receipts fund (2,535)
Decrease in reserve for replacements - net 7,812
Net cash provided by investing activities 5,277
FINANCING ACTIVITIES:
Partners' distributions (86,131)
Mortgage principal payments (17,568)
Net cash used by financing activities (103,699)
Net increase in cash 52,277
CASH, at beginning of year 263,739
CASH, at end of year $ 316,016
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1994
(Continued)
Cash Flows from Operating Activities:
Net loss $ (74,566)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and Amortization 206,110
Changes in operating assets and liabilities:
Increase in accounts receivable (13,627)
Increase in tenants' rents receivable (2,286)
Increase in prepaid expenses (21,757)
Decrease in tenants' security deposits 2,169
Increase in deposits in escrow (5,960)
Increase in accounts payable and accrued
expenses 61,445
Decrease in tenants' security deposits
payable (835)
Increase in prepaid rents 6
Net cash provided by operating activities $ 150,699
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
Financial Statements are prepared on the accrual basis and all development
and construction costs were capitalized. The partnership, for tax purposes,
charged to expense certain costs, such as interest and real estate taxes
during construction. Accordingly, the cost of property and equipment shown
in these statements includes $649,227 which has been deducted for tax
purposes.
The balance sheet does not give effect to any assets that the partners
may have outside their interest in the partnership, nor to any personal
obligations, including income taxes, of the individual partners.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. Depreciation of buildings is
based on a 25 year life using the straight-line method for financial
reporting purposes. For income tax purposes, accelerated depreciation
methods are used.
AMORTIZATION
Amortization of financing costs is based on a forty year life using the
straight-line method for both financial reporting and income tax purposes.
INCOME TAXES
The partnership, as an entity, is not subject to income tax. The
partners' share of the loss for tax purposes is includable in their income
tax returns.
CASH AND CASH EQUIVALENTS
For purposes of statement of cash flows, the Partnership considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
<PAGE>
ASHLAND COMMONS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
Ashland Commons Associates is a Massachusetts limited partnership which was
formed on September 29, 1982 for the purpose of owning, rehabilitating and
operating a multi-unit apartment complex containing 96 residential units
under the provisions of Section 221 (d)(4) of the National Housing Act.
The partnership has a contract with HUD to receive rent subsidy equal to
approximately 80% of the toal rental income.
NOTE 2 - MORTGAGE LOAN PAYABLE
The mortgage note is insured by the Federal Housing Administration (FHA) and
is payable in monthly installments of approximately $48,283, including
interest at 11.728% per annum, through 2024. Annual principal payments will
average approximately $25,275 each year for the next five years.
The partnership is required to make monthly payments of $2,094 into a fund
for replacements. Withdrawals from this fund can only be made upon the
approval of the Federal Housing Commissioner.
The partnership and its partners have no personal liability on the mortgage
loan; the mortgaged property is the only collateral for the loan.
NOTE 3 - RELATED PARTY TRANSACTIONS
The partnership pays a 4.5% management fee based on gross revenues
collected, which, at present, is capped at $41.82 PUPM, to an affiliate of
a general partner, and also $509 per month for data processing.
NOTE 4 - ACCOUNTS PAYABLE
Accounts payable consisted of:
Payroll $ 3,652
Insurance 110
Operating and maintenance 96,756
Utilities 12,132
Administrative expenses 6,617
Total $ 119,267
NOTE 5 - CAPITAL DISTRIBUTION RESTRICTION
No distribution of assets may be made except from "surplus cash" as defined
in the regulatory agreement with the Federal Housing Administration. Total
distributions are limited to $92,045 per annum as allowed by MHFA.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
REPORT ON FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1996
<PAGE>
CONTENTS
Page
Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Profit and Loss 5
Statement of Partners' Equity (Deficit) 6
Statement of Cash Flows 7
Summary of Accounting Policies 8
Notes to Financial Statements 9
<PAGE>
February 5, 1997
To the Partners of
Rockledge Apartments Associates
Woburn, Massachusetts
We have audited the accompanying balance sheet of Rockledge Apartments
Associates, MHFA Project No. 71-187-N, (a limited partnership) as of
December 31, 1996 and the related statements of operations, partners'
equity (deficit) and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. 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
audit provides 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 Rockledge Apartments
Associates as of December 31, 1996, and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.
Lloyd B. McManus, C.P.A., P.C.
Boston, Massachusetts
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
BALANCE SHEET
DECEMBER 31, 1996
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $164,844
Tenants: Accounts Receivable 7,196
Total Current Assets 172,040
DEPOSITS HELD IN TRUST - FUNDED
Tenants' Security Deposits (Contra) 25,103
Total Deposits Held in Trust 25,103
RESTRICTED DEPOSITS AND FUNDED RESERVES
Mortgage Escrow Deposits 16,219
Reserve for Replacements 173,341
Total Deposits 189,560
FIXED ASSETS
Land 90,000
Building (Mortgaged) - Note 2 1,888,360
Less Accumulated Depreciation 1,077,953
900,407
$1,287,110
<PAGE>
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts Payable $18,804
Accrued Interest Payable 1,977
Mortgage Payable - Current Portion 23,584
Total Current Liabilities 44,365
DEPOSIT LIABILITIES
Tenants' Security Deposits (Contra) 23,358
Total Deposits Liabilities 23,358
LONG-TERM LIABILITIES
Note payable to affiliate - Note 335,922
Mortgage Loan Payable - Note 2 1,252,527
Less: Current Portion 23,584
Total Long-Term Liabilities 1,264,865
Total Liabilities 1,332,588
COMMITMENTS AND CONTINGENCIES - NOTES 2,3, AND 4
PARTNERS' EQUITY (DEFICIT) - Note 4:
General Partners 3,417
Limited Partners (48,895)
Total Partners' Deficit (45,478)
$1,287,110
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED DECEMBER 31, 1996
REVENUES:
Rental income, less vacancies of $10,596 $376,348
Interest income 18,848
Miscellaneous income 587
Total revenues 395,783
COST OF OPERATIONS:
Repairs and maintenance $111,343
Salaries and wages 67,501
Real estate taxes 24,035
Management fee (Note 4) 22,793
Utilities 46,256
Administrative 27,066
Insurance 5,548
Payroll taxes and employee
benefits 16,012
Depreciation and Amortization 65,048 385,652
Income before interest expenses 10,131
INTEREST EXPENSE (Notes 2 and 3) 28,648
NET LOSS $(18,517)
Net Loss to General Partners $556
Net Loss to Limited Partners $17,967
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEAR ENDED DECEMBER 31, 1996
General Limited
Total Partner Partners
BALANCE, at December 31, 1995 $ (26,961) $ 4,215 $ (31,176)
Net loss for the period (18,517) (556) (17,961)
BALANCE, at December 31, 1996 $ (45,478) $ 3,659 $ (49,137)
Percent of interest in profit
and losses 100% 3% 97%
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996
OPERATING ACTIVITIES:
Net loss $ (18,517)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and Amortization 65,048
Changes in operating assets and liabilities:
Decrease in tenants' rents receivable 7,144
Increase in tenants' security deposits (1,017)
Decrease in mortgage escrow deposits 1,201
Decrease in accounts payable and accrued
expenses (8,185)
Decrease in tenants' security deposits
payable (510)
Net cash provided by operating activities 45,164
INVESTING ACTIVITIES:
Increase in reserve for replacements - net (55,267)
FINANCING ACTIVITIES:
Note payable to affiliate principal payments (7,743)
Mortgage principal payments (21,979)
Net cash used by financing activities (29,722)
Net decrease in cash and cash equivalents (39,825)
CASH AND CASH EQUIVALENTS, at beginning of year 204,669
CASH AND CASH EQUIVALENTS, at end of year $ 164,844
Disclosure of Accounting Policy and Supplemental Information:
Supplemental Disclosures of Cash Flow information:
Cash paid during the year for interest $ 106,766
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
Financial Statements are prepared on the accrual basis and all development
and construction costs were capitalized.
The balance sheet does not give effect to any assets that the partners may
have outside their interest in the partnership, nor to any personal
obligations, including income taxes, of the individual partners.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. Depreciation of buildings and
equipment is based on a twenty-five year life and a five year life
respectively. The ACRS method is used for tax purposes.
INCOME TAXES
The partnership, as an entity, is not subject to income tax. The partners'
share of the loss for tax purposes is includable in their income tax returns.
CASH AND CASH EQUIVALENTS
For purposes of statement of cash flows, the Partnership considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
Rockledge Apartments Associates is a Massachusetts limited partnership
which was formed on February 24, 1973 for the purpose of owning,
rehabilitating and operating a multi-unit apartment complex containing 60
residential units. The partnership has a contract with HUD to receive rent
subsidy equal to approximately 84% of the total rental income. The contract
expires in May, 2018.
NOTE 2 - MORTGAGE LOAN PAYABLE
The mortgage note is payable to the Massachusetts Housing Finance Agency
(MHFA) over a forty year period, in monthly installments of approximately
$3,841 (after interest subsidy payments of $6,597 monthly), including
interest at 7.5485% per annum, through 2018. Principal payments for the
next five years are as follows:
1997 23,584
1998 25,310
1999 27,116
2000 29,163
2001 31,311
The partnership is required to make monthly payments of $7,858 to MHFA for
real estate taxes, insurance, and a reserve for replacements. Withdrawals
must have the approval of MHFA.
Management believes it is not practical to estimate fair market value of
the mortgaged property because it is not determinable as to whether
financing with similar characteristics is currently available to the
partnership.
The partnership and its partners have no personal liability on the mortgage
loan; the mortgaged property is the only collateral for the loan.
NOTE 3 - NOTES PAYABLE
The note payable to affiliate bears interest at the rate of 12% per annum
for a period of 15 years at which time the note is payable in full.
Interest is payable only from Distributable Cash and residual amounts of
Net Capital Transactions proceeds.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 4 - RELATED PARTY TRANSACTIONS
The partnership pays to an affiliate of a general partner a monthly
management fee of 6% rents collected and a monthly bookkeeping fee of $375,
and an annual fee of $1,862 to another affiliate of a general partner.
NOTE 5 - CAPITAL DISTRIBUTION RESTRICTION
No distribution of assets may be made except from "surplus cash" as defined
in the regulatory agreement with the MHFA. Annual distributions are limited
to $9,847, as allowed by MHFA.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
REPORT ON FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1995
<PAGE>
CONTENTS
Page
Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Profit and Loss 5
Statement of Partners' Equity (Deficit) 6
Statement of Cash Flows 7
Summary of Accounting Policies 8
Notes to Financial Statements 9
<PAGE>
January 24, 1996
To the Partners of
Rockledge Apartments Associates
Woburn, Massachusetts
We have audited the accompanying balance sheet of MHFA Project No. 71-187-N
of the Rockledge Apartments Associates (a limited partnership) as of
December 31, 1995 and the related statements of operations, partners'
equity (deficit) and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. 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 audit provides 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 MHFA Project No.
71-187-N as of December 31, 1995, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
Lloyd B. McManus, C.P.A., P.C.
Boston, Massachusetts
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
BALANCE SHEET
DECEMBER 31, 1995
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $204,669
Tenants: Accounts Receivable 14,340
Total Current Assets 219,009
DEPOSITS HELD IN TRUST - FUNDED
Tenants' Security Deposits (Contra) 24,086
Total Deposits Held in Trust 24,086
RESTRICTED DEPOSITS AND FUNDED RESERVES
Mortgage Escrow Deposits 17,420
Reserve for Replacements 118,074
Total Deposits 135,494
FIXED ASSETS
Land 90,000
Building (Mortgaged) - Note 2 1,888,360
Less Accumulated Depreciation 1,012,960
965,400
OTHER ASSETS
Deferred Charges 55
$1,344,044
<PAGE>
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts Payable $26,862
Accrued Interest Payable 2,104
Mortgage Payable - Current Portion 21,979
Total Current Liabilities 50,945
DEPOSIT LIABILITIES
Tenants' Security Deposits (Contra) 23,868
Total Deposits Liabilities 23,868
LONG-TERM LIABILITIES
Note payable to affiliate - Note 343,665
Mortgage Loan Payable - Note 2 1,274,506
Less: Current Portion 21,979
Total Long-Term Liabilities 1,296,192
Total Liabilities 1,371,005
COMMITMENTS AND CONTINGENCIES - NOTES 2,3, AND 4
PARTNERS' EQUITY (DEFICIT) - Note 4:
General Partners 8,972
Limited Partners (35,933)
Total Partners' Deficit (26,961)
$1,344,044
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED DECEMBER 31, 1995
REVENUES:
Rental income, less vacancies of $5,838 $392,567
Interest income 15,258
Miscellaneous income 880
Total revenues 408,705
COST OF OPERATIONS:
Repairs and maintenance $89,579
Salaries and wages 47,910
Real estate taxes 43,163
Management fee (Note 4) 23,586
Utilities 44,090
Administrative 28,711
Insurance 5,578
Payroll taxes and employee
benefits 12,508
Depreciation and Amortization 65,137 360,262
Income before interest expenses 48,443
INTEREST EXPENSE (Notes 2 and 3) 30,822
NET INCOME $17,621
Net Income to General Partners $529
Net Income to Limited Partners $17,092
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF PARTNERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1995
General Limited
Total Partner Partners
BALANCE, at December 31, 1994 $ (44,582) $ 3,686 $ (48,268)
Net Income for the period 17,621 5,286 12,335
BALANCE, at December 31, 1995 $ (26,961) $ 8,972 $ (35,933)
Percent of interest in profit
and losses 100% 3% 97%
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1995
OPERATING ACTIVITIES:
Net income $ 17,621
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and Amortization 65,137
Changes in operating assets and liabilities:
Increase in tenants' rents receivable (3,540)
Decrease in prepaid expenses 5,745
Increase in tenants' security deposits (3,256)
Increase in mortgage escrow deposits (3,394)
Increase in accounts payable 5,757
Increase in tenants' security deposits
payable 3,619
Decrease in prepaid rents (90)
Net cash provided by operating activities 87,599
INVESTING ACTIVITIES:
Decrease in reserve for replacements - net 4,628
FINANCING ACTIVITIES:
Note payable to affiliate principal payments (1,812)
Mortgage principal payments (20,486)
Net cash used by financing activities (22,298)
Net increase in cash and cash equivalents 69,929
CASH AND CASH EQUIVALENTS, at beginning of year 134,740
CASH AND CASH EQUIVALENTS, at end of year $ 204,669
Disclosure of Accounting Policy and Supplemental Information:
Supplemental Disclosures of Cash Flow information:
Cash paid during the year for interest $ 114,191
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
Financial Statements are prepared on the accrual basis and all development
and construction costs were capitalized.
The balance sheet does not give effect to any assets that the partners may
have outside their interest in the partnership, nor to any personal
obligations, including income taxes, of the individual partners.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. Depreciation of buildings and
equipment is based on a twenty-five year life and a five year life
respectively. The ACRS method is used for tax purposes.
INCOME TAXES
The partnership, as an entity, is not subject to income tax. The partners'
share of the loss for tax purposes is includable in their income tax returns.
CASH AND CASH EQUIVALENTS
For purposes of statement of cash flows, the Partnership considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
Rockledge Apartments Associates is a Massachusetts limited partnership
which was formed on February 24, 1973 for the purpose of owning,
rehabilitating and operating a multi-unit apartment complex containing 60
residential units.
NOTE 2 - MORTGAGE LOAN PAYABLE
The mortgage note is payable to the Massachusetts Housing Finance Agency
(MHFA) over a forty year period, in monthly installments of approximately
$3,841 (after interest subsidy payments of $6,597 monthly), including
interest at 7.5485% per annum, through 2018. Principal payments for the
next five years are as follows:
1996 21,979
1997 23,584
1998 25,310
1999 27,116
2000 29,163
The partnership is required to make monthly payments of $7,858 to MHFA for
real estate taxes, insurance, and a reserve for replacements. Withdrawals
must have the approval of MHFA.
The partnership and its partners have no personal liability on the mortgage
loan; the mortgaged property is the only collateral for the loan.
NOTE 3 - NOTES PAYABLE
The note payable to affiliate bears interest at the rate of 12% per annum
for a period of 15 years at which time the note is payable in full.
Interest is payable only from Distributable Cash and residual amounts of
Net Capital Transactions proceeds.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 4 - RELATED PARTY TRANSACTIONS
The partnership pays a monthly management fee of 6% rents collected to an
affiliate of a general partner and an annual fee of $1,862 to another
affiliate of a general partner.
NOTE 5 - CAPITAL DISTRIBUTION RESTRICTION
No distribution of assets may be made except from "surplus cash" as defined
in the regulatory agreement with the MHFA. Annual distributions are
limited to $9,847, as allowed by MHFA.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
REPORT ON FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1994
<PAGE>
CONTENTS
Page
Auditors' Report 3
Financial Statements:
Balance Sheet 4
Statement of Operations (Form F.C. - 2A) 5
Statement of Partners' Equity
(Deficit) (Form F.C. - 3C) 6
Statement of Cash Flows 7
Summary of Accounting Policies 8
Notes to Financial Statements 9
<PAGE>
January 25, 1995
To the Partners of
Rockledge Apartments Associates
Woburn, Massachusetts
We have audited the accompanying balance sheet of MHFA Project No. 71-187-N
of the Rockledge Apartments Associates (a limited partnership) as of
December 31, 1994 and the related statements of operations, partners'
equity (deficit) and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. 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 statements presentation. We believe that
our audit provides 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 MHFA Project No.
71-187-N as of December 31, 1994, and the results of its operations and its
cash flow for the year then ended in conformity with generally accepted
accounting principles.
Lloyd B. McManus, C.P.A., P.C.
Boston, Massachusetts
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
BALANCE SHEET
December 31, 1994
ASSETS
Property (mortgaged) - Note 2:
Land $ 90,000
Building 1,624,825
Furnishings and equipment 263,535
1,978,360
Less accumulated depreciation 947,967
NET PROPERTY AND EQUIPMENT 1,030,393
Cash 134,740
Rents receivable 10,800
Tenants' security deposits 20,830
Prepaid expenses 5,745
Deposits in escrow 14,026
Reserve for replacement funded 122,702
Deferred finance fees 199
$ 1,339,435
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
Mortgage loan payable (Note 2) $ 1,294,992
Note payable to affiliate (Note 3) 45,477
Accounts payable 2,073
Accrued expenses 21,136
Tenants' security deposits payable 20,249
Prepaid rent 90
TOTAL LIABILITIES 1,384,017
Commitments and contingencies (Notes 2, 3 and 4)
Partners' deficit (Note 5) (44,582)
$ 1,339,435
See accompanying summary of accounting policies
and notes to financial statement.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
REVENUES:
Gross Potential Rental Income $ 412,701
Less Vacancies, Bad Debts & Section 236
Excess Rental Income remitted 31,755
Effective Rental Income 380,946
Interest subsidy 80,546
Other income - Total 10,847
Residual receipts (remitted) or reimbursed --
Total Income 472,339
OPERATING EXPENSES:
Administration $ 68,685
Maintenance, Res. Svcs. & Security 128,761
Utilities 43,890
Taxes (R.E. & Other) 41,970
Insurance 6,772
Depreciation and Amortization 65,137
Interest (Financing & Other) 107,435
Subtotal 462,650
Net Income for the Development
before Non-Operating Items 9,689
Non-Operating Items (Gains or Losses) --
Net Income for the Development 9,689
Add: Revenues of the Partnership not
Applicable to the Development --
Subtr: Expenses of the Partnership not
Applicable to the Development 5,460
Net Income for the Partnership $ 4,229
F.C. - 2A
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 023-35279
STATEMENT OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEAR ENDED DECEMBER 31, 1994
General Limited
Total Partners Partners
BALANCE, December 31, 1993 $ (48,811) $ 3,559 $ (52,370)
Add: Capital Contributions -- -- --
Add: Net Income for the period 4,229 127 4,102
Deduct: Distribution -- -- --
BALANCE, December 31, 1994 $ (44,582) $ 3,686 $ (48,268)
Form F.C. - 3C
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 071-187-N
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1994
OPERATING ACTIVITIES:
Net Income $ 4,229
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and Amortization 65,137
Changes in operating assets and liabilities:
Increase in rents receivable (4,154)
Decrease in prepaid expenses 762
Decrease in tenants' security deposits 3,863
Increase in insurance and real estate
tax escrows (3,750)
Decrease in accounts payable (1,377)
Decrease in accrued expenses (9,632)
Decrease in tenants' security deposits
payable (2,110)
Decrease in prepaid rents (209)
Net cash provided by operating activities 52,759
INVESTING ACTIVITIES:
Increase in reserve for replacements - net (16,648)
Net cash used in investing activities (16,648)
FINANCING ACTIVITIES:
Decrease in mortgage loan payable (19,097)
Net cash used in financing activities (19,097)
Net increase in cash 17,014
CASH, at beginning of year 117,726
CASH, at end of year $ 134,740
Supplemental Disclosures of Cash Flow information:
Cash paid during the year for interest $ 117,392
See accompanying summary of accounting policies
and notes to financial statements.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
Financial Statements are prepared on the accrual basis and all development
and construction costs were capitalized.
The balance sheet does not give effect to any assets that the partners may
have outside their interest in the partnership, nor to any personal
obligations, including income taxes, of the individual partners.
PROPERTY, EQUIPMENT AND DEPRECIATION
Property and equipment are stated at cost. Depreciation of buildings and
equipment is based on a twenty-five year life and a five year life
respectively. The ACRS method is used for tax purposes.
INCOME TAXES
The partnership, as an entity, is not subject to income tax. The partners'
share of the loss for tax purposes is includable in their income tax returns.
CASH AND CASH EQUIVALENTS
For purposes of statement of cash flows, the Partnership considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
Rockledge Apartments Associates is a Massachusetts limited partnership
which was formed on February 24, 1973 for the purpose of owning,
rehabilitating and operating a multi-unit apartment complex containing
60 residential units.
NOTE 2 - MORTGAGE LOAN PAYABLE
The mortgage note is payable to the Massachusetts Housing Finance Agency
(MHFA) over a forty year period, in monthly installments of approximately
$3,841 (after interest subsidy payments of $6,597 monthly), including
interest at 7.5485% per annum, through 2018. Principal payments for the
next five years are as follows:
1995 20,486
1996 21,979
1997 23,584
1998 25,310
1999 27,116
The partnership is required to make monthly payments of $7,861 to MHFA for
real estate taxes, insurance, and a reserve for replacements. Withdrawals
must have the approval of MHFA.
The partnership and its partners have no personal liability on the mortgage
loan; the mortgaged property is the only collateral for the loan.
NOTE 3 - NOTES PAYABLE
The note payable to affiliate bears interest at the rate of 12% per annum
for a period of 15 years at which time the note is payable in full.
Interest is payable only from Distributable Cash and residual amounts of
Net Capital Transactions proceeds.
<PAGE>
ROCKLEDGE APARTMENTS ASSOCIATES
(a limited partnership)
PROJECT NO: 71-187-N
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 4 - RELATED PARTY TRANSACTIONS
The partnership pays a monthly management fee of 6% rents collected to an
affiliate of a general partner and an annual fee of $1,862 to another
affiliate of a general partner.
NOTE 5 - CAPITAL DISTRIBUTION RESTRICTION
No distribution of assets may be made except from "surplus cash" as defined
in the regulatory agreement with the MHFA. Annual distributions are limited
to $9,847, as allowed by MHFA.
