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1986 1,132,417.73
1987 1,065,843.73
1988 995,475.00
1989 959,489.00
1990 855,861.00
During respondent's audit of petitioner's 1990 return,
respondent's agent learned of petitioner's practice of
recording interest income on its books and records only at
the time a loan was paid off or at the time an automobile
was repossessed. In order to recompute petitioner's
interest income for Federal tax purposes, the agent
sought and obtained from petitioner's representatives the
customer ledger cards for all loans outstanding at the
end of 1990. From the documents supplied by petitioner's
representatives, including the ledger cards and certain
loan documents that had been prepared at the time the
loans were made, the agent computed the amount of deferred
interest on each outstanding loan, the interest that
should have been reported on that loan using the accrual
method of accounting, and the amount of deferred interest
with respect to that loan at the end of 1990. The totals
computed by the agent for all the loans outstanding are as
follows:
Aggregate deferred interest
per ledger cards $6,175,575.00
Interest earned
through end of 1990 3,084,179.12
Ending deferred interest 3,091,395.88
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