The Kroger Company and Subsidiaries - Page 29

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                  Dr. Bates determined that the accounting system utilized by                         
            Florida Choice produced, in the aggregate, a net underestimate                            
            for the years 1984 through 1988 of 3.9 percent of sales-based                             
            taxable year shrinkage and 2.9 percent of time-based taxable year                         
            shrinkage.  He determined that respondent's method produced a net                         
            underestimate of 6.1 percent of sales-based taxable year                                  
            shrinkage and 5.2 percent of time-based taxable year shrinkage.                           
            Dr. Bates determined that the maximum error under respondent’s                            
            method was 20.2 percent of sales-based taxable year shrinkage and                         
            20.5 percent of time-based taxable year shrinkage (compared to                            
            12.3 percent and 14.0 percent, respectively, under the system                             
            utilized by Florida Choice).  He concludes that respondent’s                              
            method is less accurate than that used by Florida Choice.                                 
                  Dr. Bates determined that the accounting system utilized by                         
            Superx produced, in the aggregate, a net underestimate for the                            
            years 1983 through 1985 of 4.7 percent of sales-based taxable                             
            year shrinkage and 4.5 percent of time-based taxable year                                 
            shrinkage.  He determined that respondent's method produced a net                         
            underestimate of 7.1 percent of sales-based taxable year                                  
            shrinkage and 6.8 percent of time-based taxable year shrinkage.                           
            Dr. Bates determined that the maximum error under respondent’s                            
            method was 9.4 percent of sales-based taxable year shrinkage and                          
            9.8 percent of time-based taxable year shrinkage (compared to 6.1                         
            percent and 5.4 percent, respectively, under the system utilized                          






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Last modified: May 25, 2011