Dayton Hudson Corporation and Subsidiaries - Page 1

                                 T.C. Memo. 1997-260                                  


                               UNITED STATES TAX COURT                                


              DAYTON HUDSON CORPORATION AND SUBSIDIARIES, Petitioner v.               
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket No. 21217-91.                    Filed June 11, 1997.           


                    P operated department stores.  P used “cycle                      
               counting” to conduct physical inventories of                           
               merchandise throughout the year.  P maintained book                    
               inventory records from which inventory closing balances                
               could be determined at yearend.  P estimated losses                    
               from shrinkage factors (e.g., theft and errors in                      
               billing) occurring from the time of the last physical                  
               count of inventory to yearend and made an accrual of                   
               the estimate.  P calculated shrinkage accruals as a                    
               percentage of sales.                                                   
                    Held:  P's systems of maintaining book inventories                
               do not clearly reflect income.  They are, thus, not                    
               sound within the meaning of sec. 1.471-2(d), Income Tax                
               Regs.                                                                  









Page:   1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011