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8/31/92 current year operating expenses must be used because
data on subsequent year operating expenses were not presented
in evidence. The more important problem is that petitioner has
suggested no reason to believe that the assumption of perfect
foresight would produce a closer approximation of the amount
petitioner actually estimated it would need at the time.
Ultimately the question is one of fact, and petitioner has not
satisfied its burden of proof. We have used current operating
expenses.
5. Respondent included prepaid expenses in current
assets. This treatment of prepaid expenses is supported by
authority. Bardahl Intl. Corp. v. Commissioner, T.C. Memo.
1966-182. Petitioner argues that this is inappropriate, since
prepaid expenses are not funds available for distribution to
shareholders. In the Bardahl analysis we compare working
capital needs with available net liquid assets. What matters
is not the absolute amounts, but the difference between them.
For purposes of this comparison, including prepaid expenses in
available net liquid assets is effectively equivalent to
deducting these expenses from working capital needs.
6. In the worksheet accompanying the notice of
deficiency the amount of “other current obligations” was stated
as $195,801, a figure taken directly from petitioner’s Form
1120, Schedule L, for TYE 8/31/89. Schedule L discloses that
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