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that during 1994, approximately eight months after the close of
petitioner’s fiscal and taxable years ended January 31, 1994, Ms.
Wu, petitioner’s controller, sent Mr. Miller the purported
product usage document.11 She provided that document to Mr.
Miller in order to have him (1) prepare and book on petitioner’s
behalf certain accounting entries and (2) reflect such accounting
entries in the Form 1120 that he was preparing on petitioner’s
behalf for the year at issue. Based on the purported product
usage document, Mr. Miller prepared adjusting journal entries in
September 1994 that debited royalty expense and credited royal-
ties payable in the amount of $1,158,084. The amount of those
entries was the same as the amount shown on the purported product
usage document as the last entry under the column headed “NET
TOTAL (IN BOTTLES)”. After having prepared the royalty adjusting
journal entries, Mr. Miller completed preparation of petitioner’s
Form 1120 for the year at issue based upon those entries and
petitioner’s financial statements for the fiscal year ended
January 31, 1994. Thereafter, but prior to booking the royalty
adjusting journal entries in petitioner’s books and prior to
filing petitioner’s return for the year at issue, Mr. Miller
confirmed with Mr. Braswell the correctness of booking those
11See supra note 9.
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