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Computation of percentage of profit to total sales

Total sales..

Profit:

Net profit per contractor before provision for Federal income
and excess profits taxes___

Add costs and expenses not allowed:

$4, 339, 379. 52

376, 537. 38

Estimated inventory understatement as at Oct. 31, 1941-
Salaries to officers in excess of $25,000 per annum for

307, 000. 00

each officer (3 officers).

225, 000. 03

489, 289. 81

137, 612. 69

16, 000. 00

14, 137. 96

24, 427. 36

Provision for bonuses to employees in excess of 10 per-
cent of salaries and wages for such employees.
Retroactive salary adjustments, considered as bonus..
Deposit on gifts for employees (Waltham watches) -
Excess amortization of dies, jigs, and fixtures.
Entertainment expenses_

Nonoperating charges, net (exhibit A).
Miscellaneous..

Total adjustments to net profit....

Net profit after adjustments. ___

36, 654. 96

4, 503. 02

1, 254, 625. 83

1, 631, 163. 21

Total sales of $4,339,379.52, divided into dollar net profit after adjustment, $1,631,163.21, gives percentage of net profit to total sales of 37.59 percent.

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Cost of sales of $2,530,601.88 divided into net profit of $1,631,163.21 equals 64.46 percent.

Computation of percentage of profit to capital and surplus

Capital and surplus as of the end of the fiscal year, Oct. 31, 1941:

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Capital and surplus of $100,000 divided into net operating profit of $1,631,163.21 gives 1,631.16 percent.

Computation of percentage of profit to contractor's investment in plant and equipment as of the end of the fiscal year Oct. 31, 1941

Plant and equipment furnished by contractor as of Oct. 31, 1941.
Net operating profit___

$329, 945. 38 1,631, 163. 21

Plant and equipment investment $329,945.38 divided into net operating profit, $1,631,163.21, gives 491.34 percent.

Computation of percentage of profit to stated capital

Stated capital....
Net operating profits.

$500.00

1, 631, 163. 21

Stated capital of $500 divided into the net operating profit of $1,631,163.21 gives 326,232.6422 percent.

Statistics on profit of contractor Jack & Heintz, Inc., fiscal year ending Oct. 31, 1941 [Unadjusted; Using figures shown by contractor's books]

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Capital and surplus with which contractor began business

Plant and equipment furnished by contractor as of Oct. 31, 1941.
Stated value of capital stock....

Percentages:

Profit to total sales....

Profit to cost of sales..

Profit to capital and surplus – .

Profit to contractor's plant and equipment investment..
Profit to stated value of capital stock

Total Army and Navy contracts awarded to Mar. 1, 1942,

as per contractor's contract files...

$4, 339, 379. 52

3, 543, 256. 92

796, 122. 60

419, 585. 22

376, 537. 38

100, 000. 00 329, 945. 38 500.00

8. 67 10. 62 376.53

114. 12

75, 307. 47

$58, 191, 899. 35

Method of computation.-Divide profit as per contractor's figures, $376,537.38, by total sales, cost of sales, capital and surplus, contractor's plant investment, and stated value of capital, respectively, for the respective percentages.

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1 Refund of California unemployment insurance deductions to June 30, 1940.

$600.00

300.00 1, 800.00

300.00 $3,000. 00

24.00

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1 Refund of California unemployment-insurance deductions to June 30, 1940.

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MEMORANDUM ON CORPORATE RECORD OF JACK & HEINTZ, INC.

A photostatic copy of the Corporate record of Jack & Heintz, Inc., is included herewith, and contains the following:

1. Articles of incorporation.

2. Stock certificates.

3. Record of meeting of incorporators, reciting that on November 2, 1940, William 3. Jack, William R. Jack, Ralph M. Heintz, and C. L. Jack acknowledged articles of incorporation; that on November 5, 1940, the articles were filed in the office of the secretary of state; and reciting the articles of incorporation.

4. Record of meeting of incorporators on November 7, 1940, to order the opening of books for subscriptions. At the meeting it was agreed the purpose in organizing was to take over the assets and business of Jack & Heintz, Ltd., a California corporation. The incorporators accepted the offer of Jack & Heintz, Ltd., to transfer all its assets to Jack & Heintz, Inc., in exchange for all capital stock of the new corporation, and the assumpton by it of the debts of the old corporation. The record recites the agreement, said agreement stating the 100 shares of stock were to be delivered, 25 shares each, to William R. Jack, William S. Jack, C. L. Jack, and Ralph M. Heintz.

5. Certificate of acknowledgement of notification of exemption from the division of securities, Department of Commerce, State of Ohio.

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