- 11 - It reported the following unappropriated retained earnings at the beginning and end of each taxable year: Beginning End Taxable Year of year of year 1985 $168,435 $165,535 1986 165,535 400,485 1987 400,485 (971,002) 1988 (971,002) (6,858,975) Petitioner reported negative taxable income on each of its 1985 through 1988 Federal income tax returns. Petitioner also reported the following "gross receipts" and "cost of goods sold": Taxable Year Gross receipts Cost of goods 1985 $307,524,610 $307,404,014 1986 521,391,751 520,838,947 1987 369,142,037 367,746,493 1988 175,924,620 175,473,765 On November 16, 1987, petitioner and the related entities signed a settlement agreement with Bear Stearns, in which the parties agreed to resolve all of their differences by Kenilworth's paying Bear Stearns a $2.5 million debt owed to Bear Stearns. Pursuant to this settlement agreement, all of the other claimants paid or received nothing. On April 29, 1988, Kenilworth filed a claim for arbitration against Prudential Bache with the New York Stock Exchange, Inc., in which it alleged that Prudential Bache owed it over $3 million as a result of transactions occurring in October 1987. Petitioner and the other related entities later joined the claim on the side of Kenilworth, and Prudential Bache filed aPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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