Cordes Finance Corporation - Page 15

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                                  Year                 Amount                                            
                                  1990               $1,440,821                                          
                                  1989               923,274                                             
                                  1988               488,357                                             
                                  1987               179,881                                             
                                  1986               43,181                                              
                                  1985               8,470                                               
                                  1984               195                                                 
                                                     3,084,179                                           
                Petitioner's trial memorandum makes the following statement                              
                concerning this element of respondent's adjustment:                                      

                            Respondent's schedule indicates it totals                                    
                      $3,084,179, but it actually foots to $3,079,767.                                   
                      Aside from this small difference, petitioner                                       
                      agrees that if a change in accounting method is                                    
                      required here, this is the correct method to use                                   
                      and that it arrives at the correct starting point                                  
                      to compute 1990 income.                                                            

                Petitioner did not specifically take issue with this                                     
                element of respondent's adjustment, either at trial or                                   
                in its post-trial briefs.                                                                
                      The second element of respondent's adjustment is based                             
                upon the discrepancy in petitioner's deferred interest                                   
                account.  On the one hand, the balance sheet submitted                                   
                with petitioner's 1990 return as Schedule L reports                                      
                $7,772,543 as the balance of petitioner's deferred interest                              
                account at the end of 1990.  On the other hand, the                                      
                aggregate deferred interest recorded on the ledger cards                                 
                for all of the loans outstanding at the end of 1990 is                                   
                $6,175,575.  Thus, petitioner's balance sheet reports                                    




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