Wayne Payne and Dorene J. Payne - Page 4

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          would sign the bid and send it back to HRDC.  The accepted bid              
          would then be recorded by Mrs. Payne or Ms. Enerson in a sales              
          journal.  Typically, a customer would pay half the cost of the              
          job when work began on the job, and the remainder at its                    
          completion.  The payments HRDC received were supposed to be                 
          recorded in an accounts receivable journal, but not all payments            
          were so recorded.  Often HRDC would receive payment for jobs                
          recorded in the sales journal for one year in the following year.           
          The payments were generally recorded in the accounts receivable             
          journal for the year in which they were received.                           
               During some of Mr. Payne’s or the other employees’ visits to           
          potential customers’ sites, small jobs would arise that could be            
          completed on the spot.  The customers generally paid the HRDC               
          employee on the spot for such jobs.  These small jobs were                  
          referred to at HRDC as “extras”, and were recorded in an extras             
          journal.  Payment for the extras was usually made by check.  The            
          extra payments were not recorded in HRDC’s sales or accounts                
          receivable journals.                                                        
               When HRDC received checks for its services, Mrs. Payne and             
          Ms. Enerson deposited certain of the checks into HRDC’s business            
          checking account and placed other checks in a drawer at HRDC’s              
          offices.  For the most part, the checks that were not deposited             
          into HRDC’s bank account were those received in payment for the             
          extras.  Mr. Payne or another employee of HRDC would then cash              

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Last modified: May 25, 2011