Frank's Casing Crew and Rental Tools, Inc. - Page 4

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          invoiced until after yearend because of lack of documentation,              
          petitioner followed a similar pattern.  Petitioner's use of the             
          invoicing date to control the accrual of income resulted in a               
          deferral of the following amounts of gross receipts for sales and           
          services that were completed during its taxable years ending in             
          1988, 1989, and 1990 but billed in the respective succeeding                
          taxable years:                                                              
               Taxable year ended             Amount                                  
               Aug. 31, 1988                 $846,897                                 
               Aug. 31, 1989                 553,623                                  
               Aug. 31, 1990                 927,451                                  
               Petitioner accrues various expenses at yearend.                        
               Respondent determined that petitioner's method of accounting           
          erroneously deferred recognizing income from sales and services             
          billed after the year in which they were completed.  Respondent             
          argues that this method was inconsistent with the all events test           
          for the accrual of income.  Respondent argues that petitioner               
          acquired a fixed right to receive income for these goods and                
          services once it completed performance.  Petitioner argues that             
          its right to receive income from these yearend sales and services           
          was not fixed in the year that the goods were delivered or the              
          services rendered, given that it could not invoice its customers            
          until the following year.  Petitioner argues that respondent                
          abused her discretion in not accepting its method of accounting,            
          which in petitioner's view results in only "minor deviations"               

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