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February 28, 1991, there were only two items listed as assets
existing as of the end of the tax year: $264 in cash and $192,3087
as "other current assets" which was identified as "note receivable-
-P. Bresson". When asked about this receivable, petitioner
testified: "I really don't know what that is." In petitioner's
initial brief, petitioner treats the purported receivable as
"consideration from Bresson back to the corporation for whatever
Bresson received, whether it be the property or whether it be the
proceeds of sale."
Schedule L also reflects that Jaussaud Enterprises had current
liabilities as of February 28, 1991, in the amount of $67,450
($49,683 as Federal tax payable and $17,767 as State tax payable)
and retained earnings of $125,122.
We believe the purported $192,308 receivable was merely
bookkeeping legerdemain. The purported receivable was created by
Mr. Canny, petitioner's accountant, long after the transfer of the
Alhambra property and without petitioner's knowledge of its
existence or import. Accordingly, we find the purported $192,308
receivable was not an asset of the corporation. Thus, the only
asset remaining after the transfer of the Alhambra property ($264
in cash) was insufficient for the corporation to pay its debts.
Consequently, we hold that respondent has established that the
7 Apparently, the $125,000 note executed on Aug. 1, 1993,
was intended to replace this $192,308 purported receivable.
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