- 10 - 1998 During 1998, Paulan wrote four checks to Sidal as follows: Jan. 20 $100,000 Feb. 17 200,000 Aug. 25 18,000 Oct. 27 650,000 Total 968,000 The source of those payments was the $1 million Merchants Bank loan. Sidal’s adjusted trial balances for the taxable years ending December 31, 1998, 1999, and 2000, reflect a note payable to Paulan in the sum of $928,000,10 and Paulan’s adjusted trial balance for the taxable year ending December 31, 1998, reflects a corresponding note receivable from Sidal. No adjusting entries were made on those trial balances to recharacterize Paulan’s 1998 payments to Sidal, to the extent of $928,000, as Paulan’s loans to petitioners and petitioners’ loans to Sidal.11 Handwritten 10 There is no explanation in the record for the discrepancy between the total amount of the 1998 Paulan checks, $968,000, and the $928,000 note payable from Sidal to Paulan reflected on Sidal’s adjusted trial balances. 11 Although (1) a handwritten entry on Sidal’s adjusted trial balance for its taxable year ending Dec. 31, 1999, indicates that the $928,000 note payable to Paulan was “reclassed by AJEs” (adjusting journal entries) and (2) Sidal’s general ledger for 1999 reflects the elimination, on Oct. 19, 1999, of $928,000 as an intercompany note to Paulan, Sidal’s adjusted trial balance for the following year (2000) still reflects the $928,000 as a note payable to Paulan as of Dec. 31, 2000.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011