Yarbrough Oldsmobile Cadillac, Inc. - Page 12

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               During the years in issue, Elvin's purported liability to              
          YOC on the debit balance of the YOC-Elvin Account was never                 
          reflected by any promissory notes to YOC or by any other loan               
          documents.  Elvin never provided YOC any collateral or security             
          for, nor was he required to make periodic payments to YOC on, the           
          debit balance of the YOC-Elvin Account.                                     
               During 1983 through 1986, Elvin did not list his purported             
          liability on the debit balance of the YOC-Elvin Account as a                
          liability on his financial statements that he prepared and                  
          submitted to banks in connection with personal loan applications.           
               On occasion from 1977 through 1984, YOC's controllers                  
          advised Elvin that consistent with Elvin's purported liability on           
          the YOC-Elvin Account, loan documents should be executed,                   
          interest payments should be made, and the outstanding debit                 
          balance in the account should be reduced.  YOC's controllers also           
          advised Elvin that YOC should not pay Elvin's personal expenses.            
               With regard to interest, during 1983 through 1986, YOC's               
          accounting system generally automatically charged interest on               
          debit balances in Account 220 subaccounts that had outstanding              
          debit balances for more than 30 days.  Interest, however, during            
          1983 and 1984 and in prior years, was not charged on the debit              
          balance in the YOC-Elvin Account.  Not until December 31, 1985,             
          after Elvin became aware that he was under criminal tax                     
          investigation, did Elvin direct YOC's controller to calculate               
          interest on the debit balance of the YOC-Elvin Account for 1985             




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