- 4 -
Upon acceptance of the customer's purchase order, AEI placed
a firm order with a vendor or subcontractor for the production of
the electronic materials for the customer. Vendors and
subcontractors sent AEI invoices for the electronic materials,
and AEI paid the invoices. When the electronic materials were
ready, vendors and subcontractors shipped them to AEI. AEI
received silicon wafers and printed circuit boards as finished
products.
AEI inspected the electronic materials that vendors and
subcontractors shipped to AEI. After inspection, AEI placed its
own labels on the goods identifying AEI as the "vendor". AEI
then repackaged and shipped the electronic materials to the
customer. AEI sent an invoice to the customer, and the customer
paid AEI's invoice for the electronic materials.
AEI has always used the cash method of accounting. AEI
treated the transaction between itself and vendors,
subcontractors, or Distribution as a sale of goods and/or
services by the vendors, subcontractors, or Distribution to AEI.
AEI treated the transaction between itself and the customer as a
sale of goods by AEI to the customer.
During the years in issue, AEI included all payments it
actually received from customers in those years in its gross
receipts. AEI also included all purchases from vendors,
subcontractors, and Distribution it actually paid in those years
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011