- 4 -
Target and Dayton's were divisions of petitioner. Target
offered a merchandise mix of two-thirds convenience-oriented
hardlines and one-third fashion softgoods. Target has had
significant growth in the number of stores it has operated; in
1980, Target operated 80 stores, in 1984, it operated 205 stores,
and, in 1993, it operated 506 stores. Dayton's included
13 stores, generally referred to as department stores, and
3 “Home” stores specializing in furniture, carpeting, and
draperies; all 16 stores were located in Minnesota, North Dakota,
South Dakota, and Wisconsin. In 1984, Target had gross receipts
of $3,098,325,882, and Dayton's had gross receipts of
$488,375,001.
B. Accounting Procedures
Petitioner's annual accounting period and taxable year was a
52/53-week year ending on the Saturday closest to January 31.
Petitioner used the accrual method of accounting for both
Federal income tax and financial reporting purposes. Gross
income was calculated using inventories to account for the
purchase and sale of merchandise. Book inventories were
maintained to determine closing inventories for taxable years for
which no physical inventories were taken at the taxable yearend.
Gross income, in a merchandising business, means gross
receipts for the period in question less cost of goods sold, plus
any income from investments and from incidental or outside
sources. Cost of goods sold, slightly simplified, equals opening
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