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Petitioner's retained earnings and the percentage by which
those retained earnings increased over the previous year's
amounts for 1985, 1992, and 1993 were:
Year Retained Earnings Percent Increase
1985 $141,939 9.2%
1992 504,507 23.7
1993 597,928 18.5
As of the end of these 3 years, petitioner reported the
following total assets, liabilities, and equity:
Year Total Assets Total Liabilities Equity
1985 $617,630 $524,691 $92,939
1992 8,097,928 7,592,421 505,507
1993 7,560,778 6,961,850 598,928
Petitioner's after-tax income (after deducting Herold's
compensation), equity, and return on equity for 1985, 1992, and
1993 were:
Year Income Equity Return on Equity
1985 $15,565 $92,939 16.75%
1992 96,512 505,507 19.09
1993 93,421 598,928 15.60
Petitioner has never paid any dividends.
4. Herold's Compensation From Petitioner
Herold has no written employment contract with petitioner.
Herold does have a written bonus plan (as explained below). In
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Last modified: May 25, 2011