Milo G. and Sarah E. Chapman, et al. - Page 7

                                                 - 7 -                                                   
            same day, Dura-Craft also paid the balance of its corporate loan                             
            by issuing a check to the Plan for $87,185 with the notation                                 
            "princ $50,000, int $37,185".  Dura-Craft's check register for                               
            the $87,185 check to the Plan bears the notation "Loan Payback                               
            from Milo-Dave-pd directly to Dura-Craft profit Share Trust."                                
                  Springbrook recorded the payment on its accounting records                             
            as follows:                                                                                  
                  Wage expense                               $10,000                                     
                  Interest expense                           18,315                                      
                  Loan payment                               15,000                                      
                  Paid to profit-sharing plan                43,315                                      
            At the time of the payment, Springbrook's accounting records                                 
            reflected a loan payable balance of $33,315.  Springbrook                                    
            computed and paid interest to the Plan on the full amount of its                             
            corporate loan despite the $10,000 loan payment which Springbrook                            
            made to Milo Chapman in 1985.  Accordingly, as of the date of its                            
            payment, Springbrook owed to Milo Chapman and David Christie a                               
            total of $14,000 in interest rather than the $18,315 which was                               
            paid.                                                                                        
                  Dura-Craft recorded the $87,185 repayment on the same date                             
            in its accounting records as follows:                                                        
                  Wage expense                               $10,000                                     
                  Interest expense                           37,185                                      
                  Loan payment                               40,000                                      
                  Paid to profit-sharing trust               87,185                                      
            At the time of the payment, Dura-Craft's accounting records                                  
            reflected a remaining loan payable balance of $40,000.                                       
            Nonetheless, Dura-Craft computed the interest owed based upon an                             




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