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Colonial Airline, Inc.
Balance Sheet - At December 31, 1948
Liabilities, Capital Stock and Surplus
Current Liabilities:
Notes payable to banks, maturing quarterly (Note 2)               $200,000
Accounts Payable                                                   487,405
Accrued liabilities                                                100,405
Deposits on air travel plan                                         29,325
Reserve for aircraft and engine overhaul (Note 3)                   57,259
                                                                  ________
           Total current liabilities                             $ 874,883
Unearned transportation revenue                                     75,997
Notes Payable to banks(Note 2)                         $350,000
Less: Amount due within one year carries under current liabilities
                                                        200,000    150,000
                                                       _________

Capital Stock and Surplus:
Capital stock - par value $1 per share:
Authorized - 1,000,000 shares
Issued and outstanding - 515,600 shares (Note 4)        $515,600
Capital surplus, pain-in(no change during year)         3,108,047
Earned surplus (deficit) since December 31, 1934, per statement of income and earned surplus (deficit) attached (note 1)       (1,032,548) 2,591,099
                                                     ___________
                                                                __________
                                                                $3,691,979
                                                                __________
                                                                __________
Notes to financial statements
Note 2: The 2 3/4 % notes payable to banks are unsecured Under the provisions of the loan agreement, however, the banks may demand collateral should the net current assets at any time be less than $500,000. Upon such demand, the Company shall issue a chattel mortgage on aircraft having a value of one and one-third times the unpaid principal amount of the notes.
In the event that the net current assets at any time are less than $400,000 or the total indebtedness (exclusive of instalments of notes maturing after one year) exceeds $1,300,000 and shall so continue for thirty days after notice to the Company by the banks, the banks may declare the notes immediately due and payable.

Note 3: The policy established in 1947 of providing for major overhaul of DC-4 aircraft and engines, based on the number of hours flown, has been continued in 1948, and major overhaul expenditures incurred have been charged to the reserve. The policy established in 1946 of charging all major overhauls on DC-3 equipment to operations as incurred has been continued and no reserve has been provided.

Note 4: Options are outstanding for the purchase of capital stock, as follows:
To official - expiring November 9, 1949 - 5,000 shared at $12.50 per share.
To underwriters - expiring February 26, 1950 - 30,000 shares at $12.25 per share.
To officer - expiring February 26, 1950 - 50,000 shares at $12.25 per share.
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