Galedrige Construction, Inc. - Page 14

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          business at hand.  Wilkinson-Beane, Inc. v. Commissioner, supra;            
          Thompson Elec., Inc. v. Commissioner, T.C. Memo. 1995-292;                  
          Honeywell Inc. v. Commissioner, supra; J.P. Sheahan Associates,             
          Inc. v. Commissioner, T.C. Memo. 1992-239.                                  
               Previously, this Court has held that a manufacturer/supplier           
          of emulsified asphalt and asphalt products that maintained a                
          yearend inventory of raw materials must use the accrual method of           
          accounting, even though it had no finished product inventory at             
          the end of the year.  Akers v. Commissioner, T.C. Memo. 1984-208,           
          affd. on this issue and revd. in part sub nom. Asphalt Prods. Co.           
          v. Commissioner, 796 F.2d 843, 849 (6th Cir. 1986).  In Asphalt             
          Prods. Co., the taxpayer was in the business of manufacturing               
          emulsified asphalt from pure asphalt using a chemical treatment             
          and a physical process.  It maintained an inventory of raw                  
          materials and had a fixed production plant with large tanks in              
          which it was able to preserve the emulsified condition of its               
          finished product, and therefore its marketable quality,                     
          indefinitely.9  The facts of Asphalt Prods. Co. and the case at             





               9    Very little road contracting work was done by Asphalt             
          Products in the colder months of December, January, and February.           
          Asphalt Products generally closed its operations completely in              
          mid-December, and all of its employees took vacations from mid-             
          December until early January.  Asphalt Products did not keep any            
          finished product in its tanks during the 2-week shutdown period.            
          Akers v. Commissioner, supra.                                               




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