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Police Athletic League of Paris Notes to Statement of Cash Receipts, Disbursements, and Resulting Cash Balances For the Year Ended December 3 I, 2002 Note I: Creation of Organization and Significant Accounting Policies The Police Athletic League (PAL)'of Paris was created on October 22, 1993 as a nvn-profit corporation under the laws of the State of Texas. The mission of PAL is to aid in the education and development of youth and to provide wholesome, supervised activities as an alternative to crime for boys and' girls. PAL is managed by a Board of Directors arid generates its operating funds primarily from donations from the public. PAL maintains its records and reports its financial statements on a cash receipts and disbursements method; whereby, income is recorded when received and expenses are recorded when disbursed. The statement of cash receipts, disbursements, and resulting cash balances is a summary of the cash activity and does not present transactions that would be included in a financial statement presented on the accrual basis of accounting, as contemplated by U.S. generally accepted accounting principles. Accordingly, the statement of cash receipts, disbursements, and resulting cash balances of the Police Athletic League of Paris is not intended to present financial position or results of operation in conformity w/th U.S. generally accepted accounting principles. PAL operates as a non-profit, volunteer agency exempt from federal income taxes under Section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3). It has been classified as an organization that is not a private foundation under Section 509(a) of the Internal Revenue Code and contributions qualify for the 50% deduction for individual donors. Note 2: Investments and Composition of Ending Cash Balances Cash balances at December 31, 2002, are as follows: Operating Account $6,180 Savings Account 14,380 Total Cash $20,560 Funds were adequately insured by :the Federal Deposit Insurance Corporation at all times throughout the year. Note 3: Income Taxes Income Taxes are not provided for in the financial statement since PAL is exempt from federal and state income taxes under Section 501(c)(3) of the htemal Revenue Code and similar state provisions.