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advances to LTD have been reduced by $75,000 under the
equity method of accounting. At December 31, 1990, LTD
has a deficit of $667,000 and incurred a net loss of
$262,000 in 1990. The management of LTD is completing
construction of certain operating facilities and
believes that LTD will become profitable in the future
and be able to repay the advances from the Company.
The collectibility of the receivable is dependent upon
future events which cannot be predicted at this time.
On the Consolidated Balance Sheets included in these financial
statements, $1,027,577 for “INVESTMENT IN AND ADVANCES TO LIMITED
PARTNERSHIPS” was listed as an asset. Of the $1,027,577,
$1,021,250 was attributable to an amount “Due from Limited
Partnership” for PK Ventures and $6,327 was attributable to an
“Investment in limited partnerships” by TPC. On the Consolidated
Statements of Cash Flows included in these financial statements,
$539,626 for “Advances to limited partnership” was listed under
investing activities.
On the Schedule L attached to PKV&S’s consolidated income
tax return for 1990, PK Ventures reported $1,116,250 due from
PKVI LP under “Other current assets” as of the end of that year.
On its consolidated income tax return for 1990, PKV&S reported
that PK Ventures had imputed interest payments from PKVI LP under
section 7872 totaling $67,772.
f. 1991
PKVI LP’s financial statements for the year ended
December 31, 1991, are not part of the record in these cases.
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