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were reflected on the books and records of Peoplefeeders, of
Square Pan, and of the other related entities.
We describe below our understanding and findings, based on
incomplete and confusing evidence, of the bookkeeping entries of
Peoplefeeders and Square Pan relating to the transfer of cash
receipts into and the payment of expenses and loan payments out
of the Intercompany bank account.
Cash receipts transferred from Peoplefeeders into the
Intercompany bank account were recorded as debits (or as
increases in cash) in favor of Peoplefeeders in what was referred
to as Peoplefeeders’ Intercompany general ledger bookkeeping
account No. 1457000 (Peoplefeeders’ Intercompany general ledger
account) and as credits to what was referred to as Square Pan’s
Intercompany general ledger account No. 1457000 (Square Pan’s
Intercompany general ledger account).
Payments out of the Intercompany bank account of
Peoplefeeders’ business expenses and of Peoplefeeders’ loan
payments to Motsenbocker and to Commerce Bank were recorded as
credits to Peoplefeeders’ Intercompany general ledger account and
apparently as debits to Square Pan’s Intercompany general ledger
account.
Payments out of the Intercompany bank account of
Peoplefeeders’ expenses and loan payments were never treated or
specifically labeled in Peoplefeeders’ or in Square Pan’s books
and records as a loan from Square Pan, and the cash receipts
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Last modified: May 25, 2011