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companies does not reflect the various loans between the Dart
companies and Mr. Oren, except for the $200,000 that Mr. Oren
lent to HL and HS from his own personal resources.6 That amount
is listed as a “NOTES PAYABLE-Stockholder”.7
5(...continued)
affiliate ($7,307) --- $181 $9,000 ($1,598) $276
LIABILITES
Notes payable-
affiliate (9,000) 1,598 --- 9,000 (1,598) ---
The total of $276,000 was listed on the combined balance sheet as
an asset of the Dart companies.
6The combined schedule of balance sheet information for 1995
provides the following relevant information (in thousands):
Dart HS HL Total
ASSETS
Notes receivable-
affiliate $325 --- --- $325
LIABILITES
Notes payable-
stockholder (15,300) $2,000 $13,500 200
Notes payable-
affiliate 16,037 (2,000) (13,500) 537
The totals of $325,000, $200,000, and $537,000, are listed on the
combined balance sheet of the Dart companies under “Notes
receivable-Affiliate”, “NOTES PAYABLE-Stockholder”, and “NOTES
PAYABLE-Affiliate”, respectively. Note 7 to the combined balance
sheet then states: “The notes payable to stockholder and
affiliate are due 375 days from the date the holders of the notes
request payment. The interest rates of the notes are fixed at
7.0%.”
7The parties stipulated an exhibit identified as Accounting
Research Bulletin No. 51, Consolidated Financial Statements,
which provides in relevant part:
In the preparation of consolidated statements,
intercompany balances and transactions should be
eliminated. This includes intercompany open account
balances, security holdings, sales and purchases,
interest, dividends, etc. As consolidated statements
(continued...)
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