The Pennington School

“Income Tax Status The Internal Revenue Service has classified the School as a tax-exempt corporation under Section 501(c)(3) of the Internal Revenue Code. However, income from certain activities that is not directly related to the School's tax-exempt purpose is subject to taxation as unrelated business income. In addition, the School qualifies for the charitable contribution deduction under Section 170(b)(1)(A) and has been classified as an organization that is not a private foundation under Section 509(a)(2). Accounting for Uncertain Tax Positions Accounting principles generally accepted in the United States of America require management to evaluate tax positions taken by the School and recognize a tax liability (or asset) if the School has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. Management has analyzed the tax positions taken by the School, and has concluded that as of June 30, 2021, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The School files a tax return in the U.S. federal jurisdiction and has no income tax related penalties and interest for periods presented in these financial statements. Should any such penalties and interest be incurred, the School's policy would be to recognize them as operating expenses. In the normal course of business, the School is subject to examination by taxing authorities. As of June 30, 2021 and through the date of this report there are no on-going audits or unresolved disputes with the various tax authorities that the School files with. As of June 30, 2021, the School had no unrecognized tax benefits.”

“Cost of goods sold............................... 24,738 rental expenses.................................. 6,553 special events expenses.......................... 7,386 ---------------------------------------------------------------- total............................................ 38,677”

“Cost of goods sold............................... 24,738 rental expenses.................................. 6,553 special events expenses.......................... 7,386 bad debt expense.................................. 120,000 ---------------------------------------------------------------- total............................................ 158,677”

“FINANCIAL AID..................................... 6,239,440 Miscellaneous variance ........................... 758 ------------------------------------------------------------------ Total ............................................ 6,240,198”

“FINANCIAL AID..................................... 6,239,440 Bad debt expenses................................. -3,651 Miscellaneous variance ........................... 758 ------------------------------------------------------------------ Total............................................. 6,236,547”