M.S. Food Stores, Inc. - Page 7

                                        - 7 -                                         
          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           




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011