Mountain State Ford Truck Sales, Inc., E.P. O'Meara, Tax Matters Person - Page 11




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          State Ford an invoice which billed it for the units that it had             
          not received, and (3) Mountain State Ford paid, for reasons not             
          disclosed in the record, the incorrect aggregate invoice price,             
          Mountain State Ford filed a shortage claim (shortage claim) with            
          the manufacturer from whom it had ordered the parts.  In those              
          instances where Mountain State Ford filed a shortage claim, the             
          manufacturer to whom such a claim was made issued a credit to               
          Mountain State Ford in an amount calculated by reference to the             
          manufacturer's price in effect around the time Mountain State               
          Ford filed the shortage claim for each unit listed in that claim.           
          The manufacturer issued a credit in that amount regardless                  
          whether it had originally charged, and sent Mountain State Ford             
          an invoice showing, a different invoice price for each such unit.           
               Mountain State Ford took a physical inventory in late                  
          September or early October, and in a couple of instances in early           
          November, of each year and adjusted the balance of the quantity             
          of the units of each type of part reflected in its perpetual                
          inventory recordkeeping system to reflect each such quantity                
          physically on hand.  After taking the physical inventory, Moun-             
          tain State Ford notified the computer vendor of each such quan-             
          tity physically on hand.  Consistent with standard industry                 
          practice in the heavy truck dealer industry, the computer vendor            
          determined the value of Mountain State Ford's parts inventory as            
          of the date of the physical inventory by computing a value for              
          the quantity of units of each type of part physically on hand by            
          using the price which the manufacturer of each such type was                

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Last modified: May 25, 2011