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The books and records of American Valmar reflect the receipt
of incoming wire transfers of American currency as credits to an
account denominated “accounts payable-contracts” (contracts
payable). At year’s end, amounts expended by American Valmar for
customer purchases, otherwise disbursed at the request of
customers, or refunded to customers, together with commissions
earned, were debited to contracts payable. Credit balances in
the contracts payable account at the end of American Valmar’s
1991, 1992, and 1993 taxable years were $1,426,653, $2,934,093,
and $2,966,428, respectively. For each of those years, the
following table shows amounts credited to contracts payable,
debits on account of purchases made and commissions charged, and
the yearend excess of such credits over such debits:
1991 1992 1993
Credits to contracts
payable: $2,365,494 $3,406,539 $1,709,983
Less:
Purchases: 894,134 1,793,669 1,553,378
Commissions: 44,707 105,430 124,270
Excess amount: 1,426,653 1,507,440 32,335
At the time American Valmar received funds from customers,
it did not necessarily have instructions as to how those funds
were to be used. Funds received from customers were held in
interest-bearing accounts or used to purchase U.S. Treasury bills
until disbursed. American Valmar retained all interest earned.
The Fort Lee Residence
On May 30, 1991, Markovski purchased a condominium apartment
in Fort Lee, New Jersey (the condominium), for $604,150.
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Last modified: May 25, 2011