Document wD7LOLG5V1ma0m5O7v5Eo0vZE

PLAINTIFF'S EXHIBIT RS-314 RILEY STOKER CORPORATION CONSOLIDATED BALANCE SHEET AND SURPLUS STATEMENTS December 31, 1939 GEORGE A. SMITH AND COMPANY Certified Public Accountants 390 MAIN STREET Worcester, Mass, RS-001686 1/17/02 NUECES GEORGE A. SMITH AND COMPANY Certified Publio Accountants 390 MAIN STREET WORCESTER, M&SS. Walter J. O'Donnell, C,P,A, Richard P. Smith, C.P.A. Maroh 26, 1940. To the Board of Directors Riley Stoker Corporation Worcester, Massachusetts We have made an examination of the Consolidated Balance Sheet of the Riley Stoker Corporation and Subsidiary Companies as at December 31, 1939, and of the Consolidated Income and Surplus Accounts for the year ended on that date. In connection therewith, we reviewed the system of internal control and accounting procedures of the Riley Stoker Corporation and the Badenhausen Corporation, and examined or tested accounting reoords and other supporting evidenoe of both companies by methods and to the extent we deemed appropriate without making a detailed audit of the transactions. With respect to the A. W, Cash Company, whose accounts were not audited by us, we were furnished with a report of independent accountants. The Parent Company has contracted to purchase at a fixed prioe per share, less than par, the outstanding preferred stock of the Badenhausen Corporation, a subsidiary. In view of this contract, the accumulated dividends on this stock are not stated on the Balance Sheet, In our opinion, the accompanying Consolidated Balance Sheet and related Statements of Income and Surplus Accounts fairly present the consolidated position of the Riley Stoker Corporation and its Subsidiaries at December 31, 1939 and the consolidated results from operations for the year ended on that date, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. (Signed) George A. Smith k Co. RS-001667 1/17/02 NUECES RILEY STOKER CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET Deoember SI, 1959 ASSETS CURRENT ASSETS Cash Receivables Customers* Notes Customers' Accounts Others $ 6,513.50 766,126.63 1,467.91 213,775.26 Less: Reserve for Doubtful Accounts Advances to Salesmen and Ereotors Royalties Accrued Inventories (Quantities and Condition determined by Company; Priced at Cost) 0 774,108.04 37,937.76 736,170.28 12,070.06 4,165.79 766,110,59 Total Current Assets 01,732,291.98 FIXED ASSETS Land Buildings Machinery and Equipment $ 175,864.11 836,650.35 1,051,336.42 Less: Reserve for Depreciation $2,063,850.88 950,900.72 Fixed Assets Under Construction 1,112,950.16 11,668.28 1,124,618.44 PATENTS 33,025.05 OTHER ASSETS Note-Secured by First Mortgage Lien on Real Estate Securities Acquired Employees' Stook Purchase Account Deposits in Closed Banks Foreign Funds (Subject to Withdrawal Restrictions) 2,731.93 8,750.55 8,755.32 987.81 11,840,36 33,065.97 DEFERRED CHARGES Prepaid Insurance, Interest, and Taxes Deferred Commissions Supplies, Repairs and Maintenance Parts 10,853.95 28,176.54 6,180.24 45,210.73 $2,968.212.17 RS-001888 1/17/02 NUECES RILEY STOKER CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET December 51, 1939 LIABILITIES CURRENT LIABILITIES Notes Payable - Banks Accounts Payable - Trade Advance Billing on Contracts Provision for Federal and State Taxes Aocrued Payroll Accrued Commissions Aocrued Insurance Customers' Deposits Other Current Liabilities Total Current Liabilities $ 320,000.00 122,995.30 112,306.93 46,115.46 11,963.04 56,755.34 6,866.21 2,961.00 1,979.90 $ 681,943.18 OTHER LIABILITIES Account Payable - Trade Deferred 0 3,555.12 Debenture Notes of Subsidiary-4^, Due January 1, 1950 105,000.00 108,555.12 PREFERRED STOCK OF SUBSIDIARY NOT HELD BY RILEY STOKER COPJP, 77,200.00 CAPITAL STOCK AND SURPLUS CAPITAL STOCK Preferred, 6/2, Par $100.00 (Authorized, 9355 shares) Issued 8041 shares $804,100*00 Less 3690 shares in Sinking Fund 569,000.00 Outstanding 4351 shares Ci435,;00.00 Common, No Par (Authorized, 350,000 shares) Issued 349,954 shares 0801,056.62 Less 6,065 shares in Treasury 17,599.29 Outstanding 343,891 shares 785,657.33 Total Capital Stock Outstanding 1,218,757.33 SURPLUS (Per Statement Attached) Capital Surplus Earned Surplus $344,855.68 536,900.86 881,756.54 CONTINGENT LIABILITIES Notes Receivable Discounted $107,654.21 (Secured by Conditional Sales Contracts") $2,968,212.17 CUMULATIVE PREFERRED STOCK DIVIDENDS IN ARREARS AT DECEMBER 31, 1939 $221,901.00 RS-001669 1/17/02 NUECES RILEY STOKER CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED SURPLUS ACCOUNT December 51, 1959 EARNED SURPLUS Balance, December 31, 1938 Add Consolidated Net Income for Year Miscellaneous Adjustments pertaining to previous years (net) Deduot Preferred Stock Dividends Paid to Minority Stockholders of Subsidiary Company Balance* December 31, 1939 0490,301.37 049,373.59 1,195.90 50,567.49 0540,868.86 3,968.00 0556,900.86 CAPITAL SURPLUS Balance, December 31, 1938 Add Excess of Par Value over Cost of Riley Stoker Corporation Preferred Stock Acquired Exoess of Par Value over Cost of Subsidiary Company Preferred Stock Acquired Balance, December 31, 1939 $313,694.89 $25,979.35 5,181.44 31,160.79 $344,855.68 RS-001670 1/17/02 NUECES RILEY STOKER CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENT OF PROFIT AND LOSS For The Year Ended December 31, 1939 Profit on Operations after Selling and Administrative Expenses and including Provision for Doubtful Accounts, but before Depreciation and Amortization Depreciation and Amortization Net Profit from Operations Other Income Gross Income Other Deductions Net Income before Federal Income Tax Provision for Federal Income Tax Net Income Carried to Surplus 0122,114.38 71,826,46 0 50,287.92 26,417.97 $ 76,705.89 13,916.59 $ 62,789.30 13,415.71 $ 49,573.59 RS-001671 1/17/02 NUECES