Photo-Sonics, Inc. v. Commissioner
United States Tax Court
Petitioner, a manufacturer of high-speed cameras, valued its inventories by including therein only its costs for direct labor and direct materials. Expenses for factory overhead were charged directly to profit and loss for the period in which they were incurred.
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Petitioner, a manufacturer of high-speed cameras, valued its inventories by including therein only its costs for direct labor and direct materials. Expenses for factory overhead were charged directly to profit and loss for the period in which they were incurred. Held, petitioner's method of inventory valuation wherein all factory overhead expenses are charged off currently and excluded from inventory costs does not clearly reflect its income and does not conform to accepted accounting standards for a manufacturing concern.
1Opinion of the Court
Fat, Judge:
The Commissioner determined deficiencies in petitioner’s income tax, 'as follows:
Fiscal year ended Aug. 31— Deficiency
1958 _$9, 377.46
1959 _ _ 33, 543.48
1960 _ 59,183. 33
The only issue for decision1 is whether or not petitioner’s method of valuing its inventories, by only including as an item of cost its expenditures for direct labor and direct materials, most clearly reflects its income and conforms as nearly as may be to the best accounting practice for a manufacturing concern.
FINDINGS OF FACT
Some of the facts 'have been stipulated, and the stipulations of facts, together with…
2Cases cited16 opinions
- Cohan v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1930
- Lucas v. Kansas City Structural Steel Co.Supreme Court of the United States · 1930
- United States Cartridge Co. v. United StatesSupreme Court of the United States · 1932
- Fruehauf Trailer Co. v. CommissionerUnited States Tax Court · 1964
- Geometric Stamping Co. v. CommissionerUnited States Tax Court · 1956
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3Cited by74 opinions
- Electric & Neon, Inc. v. CommissionerUnited States Tax Court · 1971
- Southern Pacific Transp. Co. v. CommissionerUnited States Tax Court · 1980
- Madison Gas & Electric Co. v. CommissionerUnited States Tax Court · 1979
- Sandor v. CommissionerUnited States Tax Court · 1974
- Coors v. CommissionerUnited States Tax Court · 1973
69 more not listed; retrieve them via the Exa API.