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At the end of fiscal year 1991, Kapsco had the following
assets:
Inventory $943,252
Accounts receivable 239,072
Cash in bank 83,709
Total 1,266,033
At the end of fiscal year 1991, Kapsco's current liabilities
totaled $804,108, of which $794,252 represented accounts payable to
petitioner. (Had there been no rebates in fiscal year 1991,
Kapsco's current liabilities would have totaled $924,108.)
Kapsco's shareholders reported the following amounts of
taxable income for 1991 on their respective Forms 1040:
M. Kirkham $24,709
J. Kirkham 44,285
L. Sponenburgh 33,750
O.R. and R. Kirkham 28,567
The record does not indicate the bases of these shareholders in
their Kapsco stock during the years at issue.
b. KAW
KAW's fiscal year 1992 financial statement reported total
shareholders' equity of $940,062 and retained earnings of $668,632.
In that year, KAW received $40,000 in rebates. (Had there been no
rebates in fiscal year 1992, KAW's retained earnings would have
been $628,632, and KAW would have had a $13,544 profit.)
At the end of fiscal year 1992, KAW had the following assets:
Inventory $746,421
Accounts receivable 213,299
Cash in bank 34,417
Total 994,137
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Last modified: May 25, 2011