Cerand & Company, Inc. - Page 4




                                        - 4 -                                         
          outstanding for 7 years.  Accordingly, among the three sister               
          corporations, advances were outstanding to petitioner for a total           
          of 22 annual accounting periods.  Petitioner accrued and reported           
          interest income with respect to 8 of the 22 accounting periods.             
          No interest was accrued or reported with respect to 14 of the 22            
          annual accounting periods.  The total amount of interest accrued            
          and reported by petitioner for the period 1984 through 1991 was             
          $175,662.  No amount of the accrued and reported interest was               
          paid by the sister corporations.  Instead, it was rolled over               
          into a note receivable each year.                                           
               The reported interest was sporadic in amount and also varied           
          as a percentage of the outstanding amount of advances.  Treating            
          the cumulative advances1 outstanding annually for each sister               
          corporation as the denominator and the amount of reported                   
          interest as the numerator,2 the following percentage rate of                
          interest would result:                                                      







               1 The outstanding annual cumulative advances used take into            
          account increases for advances and reductions for any payments or           
          credits during the year.                                                    
               2 No interest income was accrued or reported by petitioner             
          with respect to one of the three sister corporations--Cerand                
          Aviation                                                                    






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011