Vanalco, Inc., a Delaware S Corporation, Richard L. Smith, Tax Matters Person - Page 10




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          not prove to be a satisfactory substitute because it required 2             
          weeks to cure fully and it could not withstand heavy use.                   
               Accordingly, Vanalco decided to replace sections of the                
          brick layer with Fondag cement.6  Fondag cement is more pliable             
          than regular cement, and it sets much more quickly and is easier            
          to use.  Moreover, like brick, Fondag cement acts as an                     
          insulator.                                                                  
               In comparison to brick, however, Fondag cement is a much               
          superior material for an insulating floor covering.  For                    
          instance, Fondag cement floors are easier and quicker to repair             
          than brick floors because as small areas of the Fondag cement               
          floor wear down, the small areas can be made to match the level             
          of the less worn unrepaired surrounding floor surface without               
          having to replace a large area as is necessary with brick floors.           
          In addition, the Fondag cement floor can be made more level than            
          the brick floor, which improves safety and allows the use of                
          labor-saving mechanical cleaning equipment.  Most importantly,              
          Fondag cement becomes electrically nonconductive in 24 hours                
          compared to 7 or more days for brick.                                       
               Vanalco removed and replaced the bricks with Fondag cement             




               6Fondag cement contains approximately 38 to 40 percent                 
          alumina, 37 to 39 percent calcium oxide, 15 to 18 percent ferrous           
          oxide and ferric oxide, and 3 to 5 percent silicon dioxide.                 




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