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deducted on the cash register tape, but the coupons themselves
were never added up by the corporate petitioner. Periodically,
after the corporate petitioner accumulated enough coupons to fill
a large grocery bag about two-thirds full, it sent such coupons
to its wholesaler or vendor who would issue a check to the
corporate petitioner for the amount of the coupons. The
corporate petitioner did not record the receipt of these coupon
checks on its books. Judy Stroud of the accounting firm of
Woolard & Hale, the corporate petitioner's accountant, could not
recall ever discussing the accounting treatment of coupons and
did not appear to have any knowledge about the corporate
petitioner's treatment of the coupons or the coupon checks.
The corporate petitioner received checks for rebates from
five wholesalers or vendors during its taxable years ended
September 30, 1987 through 1990: Quinn Wholesale Company, Inc.
(Quinn), Eastern Coca Cola Bottling Company (Coke), Carolina
Dairies Corporation (Carolina Dairies), Philip Morris, and Nash
Finch Company (Nash Finch). Quinn and Nash Finch issued checks
for both rebates and coupons. Mr. Sutton indicated that the only
way he could distinguish the rebate checks from the coupon checks
was by the wholesaler's or vendor's name. Only half of the
rebate checks were recorded on the corporate petitioner's books.
In a few instances, rebate checks had been credited toward the
corporate petitioner's purchase account with the vendor.
Approximately one-third of the coupon checks were recorded on the
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