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1985 10,693,635 3,546,647 3,546,647 2,922,000 4,830,348
1 Before deduction of officers compensation.
2 This year, petitioner's first, represents approximately 8 months of
operation.
Officer Compensation
Percentages
Taxable Officer Compensation Divided by:
Year Gross
Ended Receipts Gross Net Income Taxable
July 31 (Net) Income Per Books Net Income
1983 1.0% 0.9% 29.2% 29.2%
1984 4.9 26.8 80.7 79.4
1985 27.3 60.5 82.4 82.4
As of the end of these 3 years, petitioner reported the following
total assets, liabilities, and equity:
Taxable
Year Ended
July 31 Total Assets Total Liabilities Equity
1983 $116,298 $52,395 $63,903
1984 900,935 500,000 400,935
1985 961,032 450 960,582
4. The Officers' Compensation From Petitioner
a. Overview
The Officers each signed an employment agreement with
petitioner that entitled each of them to $650,000 of compensation
per year.
b. Mr. Woll's Efforts
Mr. Woll recognized that he was a minority shareholder and
he believed that, in the absence of an employment agreement,
Mr. Laviano could set Mr. Woll's compensation at any amount.
One of the Officers' first efforts to address the concerns of
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