- 6 - During the years in issue, Dix Scrap purchased scrap metal belonging to Simco as follows, with all payments in cash made directly to John, which he retained: Period relating Total number of to Simco’s year Total amount separate sales July 1, 1989 - $62,699 63 June 30, 1990 July 1, 1990 - 80,589 106 June 30, 1991 July 1, 1991 - 33,870 60 Dec. 31, 1991 Period relating to John’s year Total amount July 1, 1989 - $21,258 Dec. 31, 1989 Jan. 1, 1990 - 79,351 Dec. 31, 1990 Jan. 1, 1991 - 76,550 Dec. 31, 1991 Neal’s Discovery of the Scrap Metal Sales Simco’s accountant was Wayne Boyer. Mr. Boyer prepared Simco’s, as well as John’s and Neal’s, tax returns and kept Simco’s books. However, Mr. Boyer was not a certified public accountant. Thus, once a year, Mr. Boyer would ask another accounting firm to do a review and compilation of Simco’s books.3 3 A compilation involves putting a business’ financial information into a financial statement format. A review involves analytical procedures, such as comparisons of financial ratios, (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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