Scarc Inc

“Scarc is recognized by the internal revenue service as a nonprofit organization under internal revenue code section 501(c)(3) and is thereby exempt from federal income taxes on related income pursuant to section 501 (a) of the code. Scarc is also exempt under title 15 of the state of new jersey corporations and associations not for profit act. Accordingly, no provision for federal or state income taxes has been presented in the accompanying financial statements. Scarc follows provisions of fasb asc, income taxes. The standard prescribes a minimum recognition threshold and measurement methodology that a tax position taken or expected to be taken in a tax return is required to meet before being recognized in the financial statements. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition as they relate to those positions. In assessing the realizability of tax benefits, management considers whether it is more likely than not that some portion or all of any tax position will not be realized. The ultimate realization of such tax positions is dependent upon the generation of future income. Management considers projected future income, and tax planning strategies in making this assessment. Scarc does not expect a significant increase or decrease to the total amounts of unrecognized tax positions during the fiscal year ended june 30, 2015. However, scarc is subject to regular audit by tax authorities, including a review of its nonprofit status, which management believes would be upheld upon examination. Scarc also believes that it has appropriate support for the positions taken on its tax returns. Nonetheless, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. As required by law, scarc files informational returns with both federal and new jersey state authorities on an annual basis. The federal return is subject to examination by the authorities within three years from the latest filing date of the federal return.”

“Rental expense 37,350. Cost of goods sold - dove 137,210. Special fundraising expenses 9,817. Accrued bond interest income”

“Cost of goods sold - dove 137,210. Rental expense 37,350. Special fundraising expenses 9,817.”