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of the calendar year to make the payment related to the marketing
funds for the last half of the calendar year. The right to the
marketing funds simply depended on the theater company's
performing as provided in the agreement during 1996.
There is no evidence in the record indicating that the
theater company did not perform as called for in the agreement
during the 1996 tax year. Mr. Harkins, as president of the
theater company, was in the best position to know the state of
his business by the end of 1996. He had control of all the
records and information related to the theater company. At
trial, he did not indicate any circumstances occurring by the end
of 1996 inconsistent with the theater company's performance
obligations under the agreement.10 Therefore, because the
theater company had performed in 1996 as provided for in the
agreement, the payment made in 1997 for the marketing funds for
the last half of 1996 should have been accrued in 1996.
Petitioners additionally argue that if the theater company
had failed to perform on the agreement during the 60-day period
10 Mr. Harkins did testify that on one occasion, the
machine used to produce fountain soft drinks at one of his movie
theaters had stopped working. In order to provide customers with
soft drinks, a movie theater manager had purchased “Coke” bottles
(by accident) at a local store. When Mr. Harkins arrived at the
movie theater, he immediately told the manager to remove the
“Coke” bottles from the movie theater. Mr. Harkins did not
indicate whether this incident occurred in 1996, and petitioners
do not cite this incident as a basis for nonperformance on the
agreement.
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