Form 3115 (Rev. 4-86) Page 5
Section G-2. Change to the Completed Contract Method or Change in Allocation of Costs

Please check (.) the appropriate boxes showing which costs are allocable to long-term contracts to the extent required by Regulations

sections 1.451-3(d)(5) and (6) for Federal income tax purposes. Please mark “N/A” in boxes for costs that do not apply to the taxpayer.

Tax Purposes
Non-Extended Period Extended Period
Present Proposed Present Proposed
Method Method Method Method

Included (.~) | Included (7) | Included (.7) | Included (.“)

Direct Material

Direct Labor

Repairs .

Maintenance .

Utilities .

Rent. ne

Indirect labor and contract supervisory wages

Indirect material and supplies.

Tools and equipment

Quality contro! and inspection .

Taxes under section 164 (other than local and foreign i income e taxes) .
Financial statement depreciation and cost depletion

Percentage depletion in excess of cost depletion :

Depreciation and amortization for Federal tax purposes in excess of financial
report depreciation and amortization for equipment and facilities in use,
Administrative costs .

Other administrative, service, or support costs .

Officers’ salaries attributable to long-term contract activities

Insurance .

Employee benefits :

Research and experimental expenses attributable to extended period long:
term contracts :

Other research and experimental: expenses

Rework labor, scrap, and spoilage

Bidding expenses incurred in the solicitation of extended period long term
contracts

Other bidding expenses. fn

Marketing, selling, and advertising .

Interest . oa

Other general and administrative costs

Section 165 losses .

Income taxes .
Cost of strikes.
Section H. Change i in Overall Method of Reporting Income of Farmers to Cash Receipts and Disbursements Method

Note: Also complete Section B.

1 Isthe taxpayeracorporation?. . . oe oo sone ee ew we... Yes = No
2 Isthe taxpayer a partnership witha corporation as asa ‘partner? oe - . .O] Yes [1 No
3 If either 1 or 2 1s “Yes,” has the taxpayer had gross receipts of $1, 000, 000 o or less In “each of its ‘tax years

beginning after 1975? . . . - +. -O Yes CI No

If “No,” attach a schedule showing which years the taxpayer's 's receipts: were more than $1, 000, 000.
4 Provide the following information for the five tax years before the year of change:
| _ Ist preceding yr ‘2nd preceding yr. 3rd preceding yr. 4th preceding yr. 5th preceding yr.

a Gross receipts from farming
b Inventory: Crops, etc toe
Livestock held for sale:
Purchased .
Raised .
Livestock held for draft breeding,
sport, or dairy purposes:
Purchased .

Raised . .
Total inventory.



Form 3115 (Rev. 4-86)

Page 4

Section E-2. Change in Method of Inventory Costing by Manufacturers and Processors.
(See Specific Instructions for Section E-2.)

Please check (14 the appropriate boxes showing which costs are included in inventoriable costs, under both the present and proposed methods, of all costs
listed in Regulations sections 1.471-11(b)(2), (c)(2)(i), and (c)(2)(ii) for Federal income tax purposes, and all costs listed in or subject to Regulations section
1.471-11(c)(2)(iii) for tax and financial statement reporting purposes. If any boxes are not checked, it is assumed that these costs are excluded from
inventoriable costs. If certain costs are not incurred , please mark “N/A” in the appropriate box.

Direct Production Costs (Regulations section 1.471-11(b)(2))

Federal income tax purposes

Present method | Proposed method

1
2

Material.
Labor.

Included (4 _|_Included (~~)

[ Part 11] Indirect Production Costs:

1

Category One Costs (Regulations section 1.471-11(c)(2)(i))
a Repairs . sone

b Maintenance .

¢ Utilities .

d Rent . :

e Indirect labor and production supervisory wages .

f Indirect materials and supplies

g Small tools and equipment .

h Quality control and inspection .

Category Two Costs (Regulations section 1. ‘471- 11(6,(2)¢i) (ee also Rev. Rul 79: 25)
Marketing .

Advertising .

Selling :

Other distribution expenses

Interest . .

Research and experimental

Section 165 losses :

Percentage depletion in excess sof cost st depletion .

~smar*eance

and amortization :
j Local and foreign income taxes .
k Past service costs of pensions .
| Administrative (general)
m Other salaries (general) .

Depreciation and amortization for Federal tax purposes in excess of financial report depreciation

Category Three Costs (Regulations section 1.471- “TO L2Xi). (Gee Federal income Tax Purposes

Financial Statements

also Rev. Proc. 75-40 and attach the data required by either section | Present method

Proposed method

Present method | Proposed method

5.02 or 5.03 of Rev. Proc. 75-40.) Included (1)

Included G~)

Included (¥~)_[_ Included ()

a Taxes under section 164 (other than local and foreign income

taxes).
Financial statement depreciation and cost st depletion

Employee benefits

Factory administrative expenses .

Officers’ salaries (manufacturing)

b

c .

d Costs of strikes, rework labor, scrap, and spoilage
e

f

&

Insurance costs (manufacturing) .

Section F. Change in in Method of Treating Vacation Pay

wn me

Is the plan(s) fully vested as of the end of the tax year preceding the year of the change?
If 'Yes,"’ enter the amount of accrued vacation pay as of the end of the tax year preceding the year of change

Number of tax years plan(s) has been vested >

-C Yes 0 No

Section G-1. Change in Method of Reporting Income frors Contracts

Pw De

Is the same method used for reporting all long-term contracts regardless of duration? If “No,” explain . .

Do you have extended period long-term contracts as defined in Regulations section 1.451-3(b)(3)?

Net adjustment required under section 481(a).... 2... we

..0 Yes ( No
.-O Yes ( No
-O Yes 0 No



Form 3115 (Rev. 4-86) Page 6
5 Method used to value inventory (check appropriate block):
O Cost__O Cost or market, whichever istower (1) Farm price (1 Unit livestock price [1] Other (explain on separate page)
Section I. Change in Method of Accounting for Depreciation

Applicants desiring to change their method of accounting for depreciation must complete this section. This information must be supplied
for each account for which a change !s requested. Note: Certain changes in methods of accounting for depreciation may be filed with the
Service Center where your return will be filed. See Rev. Proc. 74-11 for the methods covered.

1 Date of acquisition >

2 a Are you the original owner or the first user of the property? . Doe ee ew  . .O Yes O No
b If residential property, did you live inthe home before rentingit?. . ......-.. .. .20 Yes ©] No

3 Isdepreciation claimed under Regulations section 1.167(a)-11 (CLADR)?. ......O0 Yes O No
If “Yes,"’ the only changes permitted are under Regulations section 1.167(a)-11(c)(1)(iii). Identify these changes on the tax return
for the year of change.

Is the property public utility property? . . . 0 Yes () No
Location of the property (city and state) >
Type or character of the property P.

4
5
6
7 Cost or other basis of the property and adjustments thereto (exclude land)
8
9

Depreciation claimed in prior tax years (Gepreciation reserve)

Estimated salvage value... . . rae
10 Estimated remaining useful life of the property > .
11 Ifthe declining balance method 1s requested, show percentage of straight: fine rates >
12. Other information, if any »

Section J. Change in Method of Accounting Not Listed Above (See Specific Instructions for Section J.)

Signature—AIll Filers (See instructions.)

Under penalties of perjury, | declare that { have examined this application, including accompanying schedules and statements, and to the best of my knowledge and belief, it 1s,
true, correct and complete. Declaration of preparer (other than applicant) is based on all information of which preparer has any knowledge.

Date

Signature of individual or firm preparing the application . Date

4 USGP.O: 1987 - 181-447 /40112


rom 8115 Application for Change in Accounting Method

(Rev. April 1986) ; ; OMB No. 1545-0152
Note: /f you are applying for a change in accounting period, use Form 1128. Expires 12-31-88.

Department of the Treasury .

Internal Revenue Service > See separate instructions.

Name of applicant (if joint returns filed, show names of you and your spouse) Tdentifying Number (See instructions)

‘Address (Number and street) ‘Applicant's area code and telephone number

Gity or town, state, and ZIP code District Director's office having jurisdiction

Name of person to contact (Please type or print) Telephone number of contact person

Check one: [J Individual [] Partnership; No. of Partners _______..- O Corporation (1 S Corporation; No. of Shareholders... .____..

CO Cooperative (Section 1381(a)) Gi tns. Co. (Sec. 801) 1 Ins.Co.(Sec.821) (1 Ins. Co. (Sec. 831)

(J Exempt organization; Enter code section __

(J Other (specify) >
NOTE: Are you making an election under section 458 or 466? - sone soe
If "Yes," see Specific Instructions for Section J. Do not fillin Section A. if “No”, "you must complete Section A.

Section A. Applicable to All Filers Other Than Those Answering “Yes” to “Note” Above
la Tax year of change begins (mo., day, yr.) - and ends (mo., day, yr.) P --

b Enter the 180th day of your tax year > If this date 1s earlier than date you signed this Form 3115 on page 6, see
General Instruction for “Late Applications” before proceeding any further.

2 Nature of business and principal source of income (including type of business designated on your latest income tax return) >

3 The following change in accounting method is requested (check and complete appropriate spaces):
a ( Overall method of accounting : from ____
b (] The accounting treatment of (identify item) >.
from (present method) > _ a
Attach a separate statement providing all relevant facts, including a detailed description of your present and proposed methods.
See also item 14 of Section A on page 2 regarding the “legal basis” for the proposed change.
c Ifachange is requested under 3b above, check the present overall method of accounting:
O Accrual (©) Cash O Hybrid (ifa hybrid method is used, explain the overall hybrid method in detail in a a
separate statement) Yes | No
d_ Is your use of your present method specifically not permitted by the Internal Revenue Code, the Income Tax Regular
tions, or by a decision of the U.S. Supreme Court? See sections 4, 5, and 6 of Rev. Proc. 84-74 . .
e Are you currently under examination, or were you or any member of the affiliated group contacted in any manner by a
representative of the Internal Revenue Service for the purpose of scheduling an examination of your Federal tax
return(s) prior to the filing of this application, or do you have an examination under consideration by an appeals officer
or before any Federal court, or is any criminal investigation pending? See sections 4 and 6 of Rev. Proc. 84-74.
f Are you a manufacturer to whom Regulations section 1.471-11 applies? If “Yes,” complete Section E-2 on page 4
4 In the last 10 years have you requested permission to change your accounting period, your overall method of accounting,

to (new method) >

S

S

or the accounting treatment of any item? (Members of an affiliated group of corporations fing aconsolidated return, see W// Ys

item 7d on page 2.) . . Fo toe . cone woe

a If “Yes,” was a ruling letter granting permission to make the change is issued? If “Yes,” attach a copy of the letter. If Mh,
“No,” attach an explanation .

b Regardless of your response to 4a, do. you or an n affiliated corporation have , pending. any y accounting method or period Ii

ruling or technical advice request in the National Office?. . . . oe
c If 4bis “Yes,” indicate the type of request (method, period, etc.) and the specific i issue involved in reach request >

a

If engaged in a business or profession: a_ Enter your taxable income or (loss)* from operations for tax purposes for the five (5) tax years

preceding the year of change: (See Specific Instructions for Section A.)
Ist preceding 2nd preceding. 3rd preceding 4th preceding 5th preceding

year ended mo. ye yearrended. mi yr yearended. mo. yt yearended mo ye yearended mo. ye
$ $ $ $ $
b Enter the amount of net operating loss to be carried over to the year of change, ifany ............. $
c Amount of investment credit carryover to year of change, ifany ..............5- bene eee LS
d__ Other credit carryover, if any. (Identify) > $

*Individuals enter net profit or (loss) from business; partnerships enter ordinary income or (loss); members of an affiliated group filing a consolidated
return, see item 7a on page 2.

For Paperwork Reduction Act Notice, see separate instructions. Form 3115 (Rev. 4-86)


Form 3115 (Rev. 4-86)

Page 2

6 Do you have more than one trade or business? .
a If “Yes,” do you account for each trade or business separately? :
b If “Yes,” see Specific Instructions for Section A.
7 Is applicant a member of an affiliated group filing a consolidated return for the tax year of change? .
a If 71s ‘‘Yes,” state parent corporation's name, identifying number, address, tax year, and Service Center where. return
is filed and provide the information requested in item 5 on a consolidated basis >

b If7is “Yes,” do all other members of the affiliated group employ the method of accounting for which the change is requested?
If "No," explain >
c If 7 is “Yes,” are any of the items involved in the calculation of the net section 481(a) adjustment attributable to
transactions between members of the affiliated group? .
If “Yes,” attach explanation.
d If 7 is “Yes,” provide the information requested in items 4a, 4b, and 4c for each member of the affiliated group. Also,
see General Instructions for “Signature.”
8 Is applicant a member of an affiliated group not filing a consolidated return for the tax year of change?
If “Yes,” are any of the items involved in the calculation of the net section 481(a) adjustment attributable to transactions.
between members of the affiliated group or other related parties? (If “Yes,” attach explanation.)
9 If change is granted, will the new method be used for financial reporting purposes?
If “No,” attach an explanation. Such explanation should include a discussion of whether your new method of accounting
conforms to generally accepted accounting principles and why it will clearly reflect income.

Yes

No

/,

10 Enter the net section 481(a) adjustment for the year |Atthe beginning of the | Atthe beginning of the | At the beginning of the __| At the beginning of the
of change, and the net section 481(a) adjustment that | year of change ending, | Ist preceding year ended, | 2nd preceding year ended, | 3rd preceding year ended,

would have been required if the requested change had [enter:mo. yr enter:mo. yf. enter:mo, yr. enter: mo.

yr

been made for each of the 3 preceding tax years
preceding the year of change. (See Specific
instructions for SectionA.) _ _ 1 $ $ $

11 Has net adjustment under section 481(a) for the year of change been reduced in any way by a pre-1954 amount?

12 Number of tax years present method has been used for which the change is requested in item 3a or 3b. (See Specific
Instructions for Section A.) _____. 2.22222 eee eee ee

13 Has your present method been designated by Rev. Rul. or Rev. Proc. more than 2 years before fre this Form 3115 asa
change in method of accounting to which section 5.12(2) of Rev. Proc. 84-74 applies?

Uh

14 State the reason(s) including the legal basis (statutes, regulation, published rulings, etc.) why you believe fe approval to make this change

should be granted. See section 7 of Rev. Proc. 84-74.

Section B. Change in Overall Method of Accounting

1 The following amounts should be stated as of the end of the tax year preceding the year of change. If none, state “None.” (Although some of the items listed below
may not have been required in the computation of your taxable income due to your present method of accounting, it 1s necessary that they be entered here for this
form to be complete. Show amounts attributable to long-term contracts on page 4, Section G-1.) Provide on a schedule the breakdown of the individual items which

make up the “Amount” for lines 1a through 1h. See Rev. Proc. 85-36 and Rev. Proc. 85-37 for rules to make this change expeditiously.

Show by () how treated on last year’s return

Amount

Included in income or Excluded from income or
deducted as expense not deducted as expense

a Income accrued but not received . . . . $

b Income received before the date on which it was earned. State
nature of income. If discount on installment loans, see Section
C below. For advance payments for goods and services, see
Specific Instructions for Section B. >

c Expenses accrued but not paid .

d Other (specify) >

e Prepaid expense previously deducted .
f Supplies on hand previously deducted.

g Inventoryonhand . . . . . $
Inventory reported on your return $
Difference.

h Reserve for bad debts (See instructions) .

i_Netadjustment (combine lines lathroughIh) . . . . ee. OS



Form 3115 (Rev. 4-86) Page 3

2 Nature of inventory > -

3 Method used to value inventory CJ Cost [I Cost or market, whichever islower (1) Other (attach explanation)

4 Method of identifying costs in inventory O Specific identification O FIFO) CO LIFO

5 Have any receivables been sold in the past Ist preceding year ended, 2nd preceding year ended, 3rd preceding year ended,
three years?. . . . . . . CJ Yes LJNo |emtermo. vr enter: mo. yr enter:mo. yr
If “Yes,” enter the amounts sold for each of the |
threeyears . . . $ $ L$

6 Attach copies of Profit And Loss ‘Statement (Schedule F (Form 1040) in the case of farmers) and Balance Sheet, if applicable, as of the
close of the tax year preceding the year of change. State accounting method used when preparing balance sheet. If books of account
are not kept, attach copy of the business schedule provided with your Federal income tax return or return of income for that period. If
amounts in 1 above do not agree with those shown on profit and loss statement and balance sheet, explain on separate page.

Section C. Change in Method of Reporting Interest (Discount) on Installment and Other Loans

1 Change with respect to interest on C1 Installment loans, (] Commercial loans, and C2 Other loans (explain) >

2 Doany of these loans cover a period in excess of 60 months?
If “Yes,” please attach an explanation. (See Rev. Rul. 83-84 and Rev. Proc. 83- 40.)
If you wish to change from the sum of the months digits method (rule of 78's) to the economic accrual of interest method for reporting
interest (discount) under Rev. Rul. 83-84, see Rev. Procs. 84-27, 84-28, 84-29, and 84-30.

3 Amount of earned or realized interest that has not been reported on your return as of the end of the tax year

CT Yes

preceding the yearofchange. . . $
4 Amount of unearned or unrealized interest that has 1s been reported ‘on your return as of the end ‘of ‘the tax year
preceding the year of change . ee

5 Method of rebating in event of prepayment of! loans >
Section D. Change in Method of Reporting Bad Debts
(See Specific Instructions for Section D before completing item 2.)
1 Ifa change to the Reserve Method 1s requested and applicant has installment sales, are such sales reported on the installment method? O Yes (J No

If “Yes,"" show whether change relates to: C1 Installment sales, C) Sales other than installment sales, or [1 Both:
2_|fachange to the Reserve Method is requested, provide the following information for the five tax years preceding the year of change:
Ist preceding year ‘2nd preceding year ‘3rd preceding year ‘th preceding year ‘th preceding year

Total sales
Deductions for specific bad debts charged off. a
Recoveries of bad debts deducted in
prior years
Year-end balances:

Trade accounts receivable .

Trade notes receivable ?.

Installment accounts receivable >
Other receivables (explain in detail) .

3  Ifachange to the method of deducting specific bad debt items is requested, € enter the amount in reserve for
bad debts at end of the year preceding the year of change. . . woe LG

If your return was examined, enter amount allowed as a result of the examination.
Ifloan company, enter only capital portion.
Applicable only to receivables attributable to sales reported on installment method. Enter only the capital portion of such receivables.

Section E-1. Change in Method of Valuing Inventories. (See Specific Instructions for Section E-1.)
Nature of all inventories 22.2.2... 22. ee eee ee eee eee ett tent tne eens eres esereeeeeeees eee
Method of identifying costs ininventory . . . . . DD Specific identification O FIFO Ouro
If “LIFO," attach copy of Form 970 adopting that method and copies of any Forms 970 filed to extend the use of the method.

3 Method used to value inventory: C] Cost [1 Cost or market, whichever is lower [1 Retailcost [) Retail lower cost or market
CD Other (attach explanation)

4 Method of allocating indirect production costs: [] Standardcost method [] Burden method (1 Other (attach explanation)

Show method and value of all inventories at the end of the tax year preceding the year of change under:

a Present method > |

b NewmethodP ._. ($e
¢_If changing to cost method, are you going to elect LIFO foridentifyingcosts?. . . . =. . =. . . . - .[) Yes [J No

Nn

a