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19. Total expenses...

20. Operating profit or (loss)

21. Other income and (deductions) net, allocable in whole or part to renegotiable business (attach schedule)....

22. Net profit for renegotiation before State income taxes.

23. Subsidy and other income and (deductions) net, allocable wholly to non-renegotiable business (attach schedule).

24. State taxes measured by income.

25. Net income per tax return.

Total officers' compensation included above.

A separate schedule by account classification should be proan explanation of the vided where necessary, together with methods of allocation applied with respect to General and Administrative Expenses.

1499.2-9 Renegotiation Bulletin No. 9: Deferred payment of excessive profits pursuant to agreement. (a) Section 1461.2 (a) of this chapter states that a refund of excessive profits pursuant to an agreement may be made by the contractor in a single payment or in installments, as the agreement may provide. Deferred single payment or payment in installments will be permitted, upon request of the contractor, only when such terms are necessary to avoid undue hardship on the contractor and will not affect adversely the interests of the Government.

(b) Normally, an agreement will require the repayment of excessive profits in a single lump sum. The payment normally will be required within 40 days after the date of the agreement (i.e., the date upon which the agreement is executed on behalf of the Government), except that if the contractor makes prompt application, within the time. stipulated in the agreement, for a computation from the Internal Revenue Service of the tax credit to which the contractor is entitled under section 1481 of the Internal Revenue Code, the payment will be due within 40 days after the date of the agreement or within 30 days after the contractor

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NOTE:-1. All expense cassifications above should be reported net of any interdepartmental credits. 2. If other than terminated voyage basis is employed for Federal income tax purposes, describe method used.

receives such tax credit computation, whichever is later. It will be only in the exceptional case that any further grace will be allowed to the contractor by the Board or by the Regional Board to which the case has been assigned.

(c) Contractors requesting provision for deferred payments should note that they may be required to pay interest thereon. Normally, under § 1461.2 of this chapter interest will not accrue on excessive profits to be refunded by agreement unless and until a default occurs in the payment of the refund. However, when the refund is to be made in installments, interest is required upon each such installment (other than the first installment payable under the agreement) which is provided to be paid more than 2 years after the close of the fiscal year to which the agreement relates. In such case, interest will begin to accrue on the first day of the third year following the close of the fiscal year to which the agreement relates, or on the due date of the first installment, whichever is later. Similarly, when a contractor requests postponement of its entire refund obligation to a date beyond such 2-year period, the con

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tractor may be required to pay interest as a
condition to the granting of such extended
terms.

(d) A contractor believing itself in need
of installment or other deferred terms of pay-
ment should request such relief and must be
prepared to establish to the Board or the cog-
nizant Regional Board that payment in ac-
cordance with the provisions customarily in-
cluded in agreements would impose undue
hardship upon the contractor. In order that
the existence and extent of the claimed need
may be properly evaluated and the risks to
the Government carefully weighed, the con-
tractor in its request shall state the terms
desired and show that such terms are no
more than are reasonably necessary to avoid
undue hardship. The contractor shall also file
with its request the following information
and data:

(1) Latest available audited balance sheet and income statement.

(2) Current unaudited balance sheet and income statement.

(3) Cash flow statement, by years, through end of proposed period of payment.

(4) Sources and amounts of credit currently utilized and available.

(5) Description of long-term debt obligations, including retirement or conversion provisions and any additions contemplated during proposed period of payment.

(6) List of amounts, if any, due from officers, stockholders, or partners or related entities, with information on the collectibility thereof; and amounts, if any, owing to officers, stockholders or partners or related entities, with description of provisions for retirement thereof during proposed period of payment.

(7) In addition to the foregoing, in the case of a partnership or joint venture, a current balance sheet for each of the principal partners or joint ventures.

(e) Upon request, the contractor shall also furnish such other or additional information and data as the Board or the Regional Board may specify in the particular case.

1499.2-10 Renegotiation Bulletin No. 10: Treatment of shorts and seconds in segregation of subcontractors' sales in the textile industry. (a) It is the practice in the textile

industry for manufacturers to purchase fabrics in excess of amounts needed to perform specific Government contracts, due to the fact that during the course of manufacture some of the purchased fabrics are, or will become unsuitable for incorporation in end products delivered under renegotiable contracts. Such unsuitable fabrics are described as "shorts" if they are not of sufficient length to meet Government specifications, and, as "seconds" if they fail to meet Government specifications for any other reason than for length.

(b) Generally, shorts and seconds, while not accepted by the Government, have a commercial value substantially equivalent to the value of fabrics which are not defective in any respect. Therefore, even though they are originally purchased to perform defense contracts, they represent no loss to the purchaser of the type which he would charge against such defense contracts if they were of no use other than as scrap or waste.

(c) The Board has decided that, until further notice, it will permit contractors who make renegotiable sales of any of the fabrics specified below, to deduct from the receipts or accruals derived from such sales any amounts referable to fabrics which are diverted from the renegotiable contracts of their purchasers because the fabrics proved to be shorts or seconds.

(d) Since the computations necessary to determine the proper amount of such deductions would be complex in many cases, due to the fact that many sellers of fabrics have a substantial number of customers, the Board has also decided, at the request of representatives of the textile cotton industry, to permit any contractor selling cotton yarns to reduce its receipts or accruals by the percentage factors listed in the column headed "Grey" and to permit any contractor selling cotton grey goods to reduce its receipts and accruals by the percentage factors listed in the column headed "Mill finish." These factors have been developed on the basis of a survey made by representatives of the cotton textile industry and have been approved by the Board with respect of fiscal years ending on or after December 31, 1953.

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1499.2-11 Renegotiation Bulletin No. 11: Computation of cost allowance for pig iron.(a) Scope. Pursuant to section 106 (b) of the act, § 1453.2 (c) of this chapter provides a cost allowance for a contractor which in the performance of renegotiable business, is engaged in an integrated process treating the product of a mine, oil or gas well, etc., to and beyond the last form or state in which the product is exempt as a raw material. This bulletin explains how an integrated steel producer should compute its cost allowance for pig iron and how the Board will apply the statutory factors to a contractor which is permitted such a cost allowance. However, the same principles may be applied

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