Affiliated Foods, Inc. - Page 12

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          current liabilities.  At the end of 1989, that total liability              
          was $343,470, and, at the end of 1990, it was $624,880.                     
          The Food Shows                                                              
               In 1989 and 1990, petitioner conducted its annual food shows           
          in Amarillo, Texas.  These shows were not open to the public.               
          Each vendor entered into an agreement with petitioner governing             
          the vendor's participation in the food show.  The food-show                 
          "agreement to participate" generally provided that:  (1) The                
          vendor would pay $450 as a booth and participation fee; (2) the             
          vendor would properly decorate its booth and provide merchandise            
          samples; and (3) the vendor would offer approved special                    
          promotions, allowances, and/or special buys on products, with the           
          condition that all offers must be a "real show special".                    
          Furthermore, vendors had to agree to submit a recommended list of           
          show sale items to petitioner, which retained the right of                  
          approval or rejection on all of the individual items.  Petitioner           
          recovered the expense it incurred in sponsoring the food show               
          through the sale of space.                                                  
               In preparation for each food show, petitioner asked the                
          participating vendors to complete order forms.  These forms had             
          spaces to identify the vendor, the product being promoted, and              
          the per-unit promotional allowance offered for each product.  The           
          vendors completed the order forms and returned them to                      

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