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note was signed on behalf of B&L by Ms. Griffiths as vice presi-
dent, and Mr. Enyart as president, of B&L.
Notes to B&L’s financial statements for the periods ended
December 31, 1992 and 1991, indicated that B&L’s long-term debt
at the end of the period ended December 31, 1992, consisted of,
inter alia, a balance of $742,299 with respect to B&L’s promis-
sory note.2 Fyffe, Jones & Associates, PSC (Fyffe, Jones),
conducted a review of those financial statements which consisted
principally of inquiries of B&L personnel and analytical proce-
dures applied to B&L’s financial data. The review conducted by
Fyffe, Jones was substantially more limited in scope than an
audit conducted in accordance with generally accepted auditing
standards.
Enyart Company filed a U.S. Corporation Income Tax Return,
Form 1120, for 1992 (Enyart Company’s return), which was signed
by Mr. Enyart. In that return, Enyart Company reported that it
placed the B&L equipment into service in 1992 and claimed a
depreciation deduction with respect to that equipment. It
calculated that claimed depreciation deduction by using a cost
basis of slightly over $300,000.
2The notes to B&L’s financial statements for the periods
ended Dec. 31, 1992 and 1991, indicated that B&L had additional
long-term debt at the end of 1992 consisting of (1) $17,213 of
principal on a note payable to Bank of Ashland which was secured
by an unidentified truck and (2) $100,002 of principal on a note
payable to Bank of Ashland that was described in those notes to
B&L’s financial statements as a “renewable line of credit.”
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Last modified: May 25, 2011