Page 5

Form 1120-FSC (1989)
Schedule G | Deductions Allocated or Apportioned to Foreign Trade Income (See specific instructions for limitations

on deductions before completing lines 1 through 14.)

(a) Using Administrative (b) Not Using Administrative
Pricing Rules Pricing Rules
1 Foreign direct costs:
a Section 924(e)(1) (advertisingand sales promotion). . ...... . . {da
b Section 924(e)(2) (certain processing and arrangingcosts). . . . . . . . Lab
¢ Section 924(e)(3) (certain transportation costs) . . . . woe ee Le
d Section 924(e)(4) (certain determination and transmittal costs) 2... Lad
e Section 924(e)(5) (assumption of creditrisk) . . . ........ . {le
f Addlineslathroughle. 2... 2... ee eee ee LE
2 Advertising . coe 2
3 Interest . 3
4 Depreciation from Form 4562 (ess depreciation « claimed elsewhere on this
return) (attach Form 4562) . . 4
5 Salaries and wages eT 5
6 Rents. ee FG
7 Sales commissions 7
8 Warehousing Se ee ee ee LB
9 Freight... . a
10 Compensation of officers. Ce ee eee £10.
11 Bad debts (see specific instructions). . . . . . 1. ee ee La
12 Pension, profit-sharing, etc. plans... .. 1... 1... [22
13 Employee benefitprogams. 2. 2. 2 2 1. 1 we ee ee 13
14 Other (list): >
14
15 Total(addlines 1fthrough14). . . . Ce ee ee ee . LAS
16a Exemption percentage from line 3d, ScheduleE |... ... . . . [6a %
b Exemption percentage from line 2d, ScheduleE . . . . {26b YM WM %
17 Deductions relating to exempt foreign trade income—Line 15 (column (@ times
line 16a and line 15 (column (b)) times line16b . . . . 17
18 Total deductions relating to nonexempt foreign trade income—Line 15 less line
17. (Enter here and on line 14, columns (a) and(b), ScheduleB.) . . . . . «1:18
Tait Tax Computation (See instructions.)
1 Check if you are a member of a controlled group (see section 927(d)(4)) . . . . .. . . PO
2 Ifthe box on line 1 is checked:
a Enter your portion of the $50,000 amount and $25,000 amount (in that order) in each taxable income
bracket:
ols |_| vols |_|
b Enter your share of the additional 5% tax (not to exceed $11,750) . . .
3 Income tax (see specific instructions to figure the tax). Check this box if the FSC is a qualified personal
service corporation (see specific instructions) » C1 3
4 Foreign tax credit (see specific instructions—attach Form 1118). 4
5 Line 3 less line 4 5
6 Personal holding company tax (attach Schedule PH (Form 1120)) 6
7a Alternative minimum tax (see specific instructions—attach Form 4626) .[Za
b Environmental tax (see specific instructions—attach Form 4626) .L7b
8 Total tax—aAdd lines 5, 6, 7a, and 7b. Enter here and on line 1, page 1 8



Form 1120-FSC (1989) Page 4
Percentages (expressed as decimals to 5 places) To Be Used in Figuring Exempt Foreign Trade
Income—Sections 923(a)(2) and (3), and 291(a)(4)
Note: /f all shareholders of the FSC are C corporations, enter .30000 on line 2d and .65217 on line 3d and skip all other lines.
If all shareholders are other than C corporations, enter .32000 on line 2d and .69565 on line 3d and skip all other lines.
1 Percentage (express as decimal to 5 places) of voting stock owned by shareholders that are C corporations =
2 Exemption for foreign trade income determined without regard to administrative pricing rules: |

a Difference between section 923(a)(2) and section 291(a)(4)(A) percentage . . ...... . {2a +02000
b Section 923(a)(2) percentage © 2 2). ee ee ee LOD 32000
|
i}
cline2atimeslinel. . 2. 2... La Se ey [Re
d Exemption percentage—Line 2b less line 2c. (Enter here and on line 9b, Schedule B; and on line 16b,
ScheduleG.). . . . . . .. . Led

3 Exemption percentage for foreign trade income determined under administrative p pricing srules:
a Difference between section B23(@)3) fraction and section 291048) fraction (16/23 - 15/23 = =

1/23) expressed asadecimal . . . [3a 04348
b Section 923(a)(3) fraction (16/23) expressedasadecimal. . . . . . . 2... es L3b -69565
cLine3atimeslinel. . 2 . 2... . [3e
d Exemption percentage—Line 3b less line 3c. (enter here and on n line 9a, "Schedule B; sand on ‘ine
16a,ScheduleG.) . . . . 3d

iia Nonexempt Foreign Trade Income (excluded from section 923) and Nonforeign Trade Income
Part I—Nonexempt Foreign Trade Income (excluded from section 923)

N Administrati
1 Enter the remaining 50% of total receipts attributable to the sale, exchange, or other | ® be soot (©) Not Proge ene tve

disposition of military property and related services. (Note: The first 50% of these
receipts was reported on lines 1 and 3 of Schedule B.) :

2 International boycott income (see specificinstructions) . . 2. . . 2. 1 ew ee
3 Illegal bribes and other payments (see specific instructions)

4 Add lines 1,2, and3
5
6

Enter cost of goods sold and other expenses related to above i income .

Nonexempt foreign trade income—Line 4 less line 5. Enter here and on line 12,
columns (a) and (b), Schedule B.) :

Part T—Nonforeign Trade Income

7 Small FSCs—lf line 6f of Schedule B exceeds line 6e of Schedule B, enter the excess. Gnclude the

deduction for cost of goods sold attributable to the excess online 18 below.) . . . . . 7
8 Interestincome. 2. 1. ee ee LB
9 Dividend income (attach schedule—see specific instructions). . . . 2. 2 ee ee ee 9
10 Carryingcharges 2 1 1 we ee eee ee £20
11 Royalties. 2 0 we ee LA
12 Otherinvestmentincome. . . . . . rn Lo an aan 12
13 Receipts excluded under section 924(f) on basis of use, subsidized receipts and receipts | from related 13
parties. 2.
14 Income from excluded property under sections 927(aX(2)and(3). . . . 6 1 ee ee ee 14
15 Income from transactions that did not qualify as foreign trade income because the “economic process
requirements” (see General Instruction C3 for definition) werenotmet. . . . . .. .. . . LAS
16

16 Otherincome 2 2 1) ee ee

17 Total—Addlines7through16. . 6 ee ee ee ee ee LAF

18 Enter deductions allocated or apportioned to line 17 income (attach schedule—see specific instructions) 18

19 Taxable nonforeign trade income—Line 17 less line 18. (Enter here and online 17,ScheduleB.) . . | 19



Page 6

Form 1120-FSC (1989)
Schedule L CEERI

Beginning of tax year End of tax year

Assets
1 Cash .
2a Trade notes and accounts receivable
b Commissions receivable .
c Less allowance for bad debts
Inventories .
U.S. government obligations
Tax-exempt securities (see instructions)
Other current assets (attach schedule) .
Loans to stockholders
Mortgage and real estate loans
Other investments (attach schedule).
10a Buildings and other depreciable assets.
b Less accumulated depreciation
11a Depletable assets .
b Less accumulated depletion
12 Land (net of any amortization) .
13a Intangible assets (amortizable only) .
b Less accumulated amortization

14 Other assets (attach schedule).
15 Total assets . :

wnuNuauaw

(a)

() (c)

@)

Yff

—

“

Liabilities and Stockholders’ Equity.
16 Accounts payable .
17. Miges., notes, bonds payable in less than 1 year
18 Transferpricespayable. . .
19 Other current liabilities (attach schedule)
20 Loans from stockholders. :
21° Mtges., notes, bonds payable in 1 year or more.
22 Other liabilities (attach schedule) .
23 Capital stock
24 = Paid-in or capital surplus
25 Retained earnings—Appropriated (attach schedule)
26 Retained earnings—Unappropriated
27 Less cost of treasury stock .
28 Total liabilities and stockholders’ equity.

¢ )

Reconciliation of Income per Books With Income per Return

Net income per books
Federal income tax .
Excess of capital losses over capital gains
Income subject to tax not recorded on
books this year (itemize):

aWNye

5 Expenses recorded on books this year
not deducted on this return (itemize):

a Depreciation . . . $

b Deductions attributable to
exempt foreign trade income $_

¢ Travelandentertainment $_

6_ Total of lines 1 through 5

7 Income recorded on books this year

not included on this return (itemize):
a Tax-exemptinterest. .$._...._....

b Exempt foreign tr trade
income .

8 Deductions on this return not charged
against book income this year (itemize):

aDepreciation. . . .$

9 Total of lines 7 and 8

10_Taxable income (line 6 less line 9)

Analysis of Unappropri

jated Retained Earnings per Books (line 26 above)

1 Balance at beginning of year
2 Net income per books
3 > Other increases (itemize): _

4 Totaloflines 1, 2, and 3

5 Distributions: a Cash .

b Stock .

c Property .
6 Other decreases (itemize):

7 Total of lines 5a,b,c,and6 .

8 Balance at end of year (line 4 less line A)



rom 1120-FSC U.S. Income Tax Return of a OMB No, 1545-0935
Foreign Sales Corporation 4 9 8 9

Department of the Treasury (Please type or print.)
Internal Revenue Service For calendar year 1989 or other tax year beginning. _, 1989 and ending.

A Date of incorporation Name D Country or U.S. possession of incor-
poration (See specific instructions.)

B Date of FSC or Small FSC Number and street (or P.O. box number if mail is not delivered to street address)
election
© Check type of election made: | City or town, state, ZIP code, or country F Total assets (See specific instructions.)

Olrsc (1 smairse $

G Refer to the last page of the instructions and enter the principal:
(21) Business code number > (2) Business activity > (3) Product or service >

H Complete the following for the shareholder (individual, corporation, partnership, trust, or estate) who at the beginning of the FSC tax year was the principal shareholder. If two
or more shareholders owned equal amounts of stack, enter the information for the shareholder that has the same tax year as the tax year of the corporation.

@) Name (@) Identifying number
(3) Address (4) Total assets (corporations only)
$
(5) Percentage of voting stock owned | (6) Taxyear end (month and year) | (7) Service Center where return was (ors tobe) filed @) Foreign owner?
Dyes Ono

Note: If the FSC 1s a member of a controlled group of corporations as defined in section 927(d)(4) and the principal shareholder tor which information 1s provided in H(1) through
H(8) above 1s not the common parent of the group, complete H(9) through H(15) below for the common parent of the group. (See specific instructions.)

(9) Name of common parent (10) Identifying number (11) _ Service Center where return was (oris to be) filed

(12) Address

(13) Percentage of voting stock owned (14) Tax year end (month and year) (15) Total assets (consolidated if applicable)
$ |
1_Enter the amount of tax-exempt interest income received or accrued duringthetaxyear. . . . . . . .$ I

J Administrative Pricing Rules: .
(1) Check the appropriate box(es) to indicate the pricing rule(s) used in determining the taxable income on transactions resulting in foreign trading gross receipts:

(2) C1 1.83% of foreign trading gross receipts (>) C1 23% of combined taxable income (c) C1] Marginal costing (@ Section 482 method

(2) Check here if the FSC and the related supplier(s) have met the payment arrangement requirements of Temporary Regulations section 1.925(a)-
1(b2)(ii) and are thereby electing under that Regulations section to have met the requirements for use of the administrative pricing rules .

Computation of Tax Due or Overpayment

1 Totaltax(ScheduleJ,line8) 2. 2 2 2 ee ee ed
2 Payments:

a 1988 overpayment credited to1989 . . | 2a Yn, ¢, Tf

b 1989 estimated taxpayments . . . 2b

¢ Less 1989 refund applied for on Form 4466 2c |¢ )JdBaly_ 2d

e Tax deposited withForm7004... . ne a 4:)

f Credit for Federal tax on fuels (attach Form 4136) . rr of

g U.S. income tax paid or withheld at source (attach Form 1042S). . . . J 2g

h Total payments—Add lines 2d through 2g . . . oe pe
3 Enter any penalty for underpayment of estimated tax—check > oO it Form 220i is attached wee LS
4 Tax due—lf the total of lines 1 and 3 is larger than line 2h, enteramountowed . . ...... .~L4
5 Overpayment—'f line 2h is larger than the total of lines 1 and3,enteramountoverpaid . . . . . .|_5
6 Enter amount of line 5 you want:_a Credited to 1990 estimated tax > l bRefunded>| 6

Under penalties of perjury, | declare that | have examined this return, including accompanying schedules and statements, and to the best of my knowledge and
Please belief, its true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Sign
Here » Signature of officer Date » Title
Paid Prepare’ y Date Checkit Preparers social seeurly no.
Preparer’s ignat self-employed > [_]
Use Only iieetterapieyeee » E.1.No.b
and address ZIP code >

For Paperwork Reduction Act Notice, see separate instructions. Form 1120-FSC (1989)


Form 1120-FSC (1989) Page 2

EIEMce.y Cost of Goods Sold and/or Operations Related to Foreign Trading Gross Receipts (See instructions.)

(a) Using Administrative (b) Not Using Administrative
Pricing Rules Pricing Rules

1 Inventory at beginning of year.
2 Purchases... . 1...
3° Costoflabor . .

4a Additional section 263A costs (see specific instructions-—attach schedule) 4a

lw Ino |e

b Othercosts(attachschedule). . . . ..... 2... « [4b
5 Total—Addlineslthrough4b . 2 1 1 ee ee ee 5
6 Inventoryatendofyear. . . . . [6
7 Cost of goods sold and/or operations—Line 5 5 less line 6. ‘Center here
and on line 7 of Schedule B. Small FSCs, see specific instructions.). . LZ
8a Check all methods used for valuing closing inventory:
(@) (1 Cost (ii) (1) Lower of cost or market as described in Regulations section 1.471-4 (see specific instructions)

(iii) (2 writedown of “subnormal’”” goods as described in Regulations section 1.47 1-2(c) (see specific instructions)
(iv) (J Other (Specify method used and attach explanation.) >

b Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) .
¢ If the LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing inventory computed under LIFO fel |
d Do the rules of section 263A (with respect to property produced or acquired for resale) applytothe FSC? . . . . . O Yes LJ No
e Was there any change in determining quantities, cost, or valuations between opening and closing inventory? If “Yes,” attach explanation. C1 yes C1 No
Additional Information Required (continued from page 1)
Yes | No
K Was the FSC at any time during the year engaged in a trade or businessintheU.S.?_. . . « rrr
L_ Is the FSC a foreign personal holding company or a personal holding company? (See specific instructions. )
M_ During the tax year, did the FSC maintain any part of its accounting/tax records on a computerized system? .
N_ FSC Qualification Requirements:
: : 77

(1) Enter the greatest number of shareholders the FSC had at any time during the tax year
(2) Did the FSC have any preferred stock outstanding at any time during the taxyear?—. fn :
(3) During the tax year, did the FSC maintain an office, in a “qualifying foreign country” or “U.S. 5; possession” (see specific
instructions), in which a complete set of books and ‘records (including invoices) for the FSC was maintained? . .
(4) During the tax year, did the FSC maintain the records required under section 6001 at a location within the U.:
(5) At all times during the tax year, did the FSC have at least one non-U.S. resident on its board of directors? .
(6) At any time during the tax year, was the FSC a member of a controlled group of corporations that included a DISC asa Mi
member? . . . soe ee .
O Foreign Management Tests. (These requirements do not apply to: small FSCs. ): 1],
(1) Did all formally convened meetings of the board of directors and all formally convened meetings of the shareholders Ml
M
Mh

i 2
take place outside the U.S? © 6 6 ee

(2) Principal bank accounts:
(a) Were all dividends, legal and accounting fees, salaries of officers, and salaries or fees of members of the board of 7
directors disbursed from bank accounts maintained outside the U.S.? (If so, these accounts are considered to be the

FSC’s principal bank accounts.) .
(b) At all times during the tax year, did the FSC maintain its principal bank accounts i ina a “qualifying foreign country”
or “U.S. possession?” (See specific instructions.) on oe . sone
Bank names > Account numbers >. eee e eee eee e eee ee eee eee
P Foreign Economic Process Requirements. (These requirements do not apply to small FSCs.):
(1) Check the appropriate box below to make an annual election to group the sales activities described under Regulations section
1.924(d)-1(c) on one of the following bases:
Cicustomer grouping Ci contract grouping C productor product line grouping C1 product or product line subgroupings
(2) Check one or both boxes below to indicate how the FSC met the “foreign direct costs” requirement:
C1 The FSC (or any person under contract with the FSC) met the 50% test of section 924(d)(1).
CI The FSC (or any person under contract with the FSC) met the alternative 85% test of section 924(d)(2). Check to indicate the
paragraphs of section 924(e) with respect to which this alternative test was satisfied: (1) (2)0 @)O MO ©O
(3) Check the appropriate box below to make the annual election described in Regulations section 1.924(d)-1(e) to group foreign direct
costs on one of the following bases: C1 customer grouping Ocontract grouping C1) product or product line grouping
Q Activities relating to disposition of export property:
(1) Check here if the FSC is electing under Regulations section 1.924(e)-1(e)(1) to bear the economic risk of nonpayment of certain

commission contracts .
(2) Indicate here which one of the 5 methods listed in that Regulations ‘section describes how the risk is to be borne by the FSC:_



Form 1120-FSC (1989)

Page 3

SYaiitasy Taxable Income (or Loss)

Part I—Income Attributable to Foreign Trade Income

1

2
3

b
4

5

6
a

b
c

d

e

f

>

oo

10
11

13
14

15

eat . (a) Using Administrative
Type of Receipt (see specific instructions) ® Pree Rules

(b) Not Using Administrative

Pricing Rules

Sale, exchange, or other disposition of export property. (Include only 50% of military

property sales. Include the other 50% online 1,ScheduleF.).........-
Lease or rental of export property for use outsidethe U.S. ... 2... 2-2-2

Services related and subsidiary to:

Sale, exchange, or other disposition of export property. (Include only 50% of services
related to the sale or other disposition of military property. Include the other 50% on
line1,ScheduleF.) 2... eee ee ee

Lease or rental ofexportproperty. .. . 1. - - ee eee ee ee

Engineering or architectural services for construction projects outside the U.S.

Managerial services for an unrelated FSC or DISC. (See specific instructions for
determination of qualifyingamount.) 2... 6. eee ee ee ee

Total Foreign Trading Gross Receipts:
All FSCs—Add lines 1 through 5. (FSCs that are not small FSCs, skip lines 6b through
6h and go to line 7. Small FSCs, complete lines 6b through 6h to determine your

foreign trading gross receipts.) . 2 6 6 6 ee ee
Small FSC limitation (section 924(b)(2)(B)). . .- . - $5 , 000,000] 00

Controlled group member's share of line 6b (see specific instructions)
Enter smaller of: (a) number of days in tax year divided by 365,

or(b)l(one). 2 ee ee eee

Proration of limitation—Line 6b or line 6c (whichever applies)
timesline6d. . ee

Enter total of columns (a) and (b), line 6a. (If commission
income is included on line 6a, see special computation rule in
specific instructions for line 6f.) we

Small FSC foreign trading gross receipts that may be taken into
account in determining exempt foreign trade income (enter the
smaller of line6eor6f). . 2 6 ee ee ee
Note: /f line 6f exceeds line 6e, enter the excess on line 7 of Schedule F. See specific
instructions for line 6h if commission income is involved.

_.

Allocate the amount from line 6g to columns (a) and (b)—See specific instructions. .

Cost of goods sold (Schedule A, line 7) (Small FSCs, enter only the portion of cost of
goods sold that is attributable to the receipts on line 6h above.) (See specific
instructions forScheduleA.). 2. 2. ee

Foreign trade income—Line 6a or 6h (whichever applies) less line 7
Exemption percentage from line 3d,ScheduleE . . 2 2. ee ee ee %

Exemption percentage from line 2d,ScheduleE . . . 2. 2... ee ee ee

Exempt foreign trade income—Multiply line 8 by lines9aand9b. . . . 2...

Nonexempt foreign trade income—Line 8lessline10. . 2... 1 ee ee ee
Enter nonexempt foreign trade income from line6,ScheduleF ......-

Addlineslland12 . 1 1 1 1 ee ee ee

Enter deductions from line 18, Schedule G, that are attributable to nonexempt foreign
tradeincome. © 2 ee

Net income attributable to nonexempt foreign trade income—Line 13 less line 14. .

Part II—Taxable Income (or Loss)

16

17
18
19

20

Taxable income attributable to foreign trade income—Enter total of columns (a) and (b), line 15, reduced by
any nontaxable income included in line 15, column (b). Attach a schedule that shows the computation of the
taxable portion of line 15,column(b) . . 6. ee ee

Taxable nonforeign trade income from line 19,ScheduleF ........+- rs
Taxable income (or loss) before net operating loss deduction and dividends-received deduction—Add lines 16 and 17
Less: a Net operating loss deduction (see specific instructions—attach schedule) . .

b Dividends-received deduction (see specific instructions—attach schedule)

cAddlines19aand19b 2 1 1.
Taxable income (or loss)—Line 18 less line 19c (enter here and see specific instructions for Schedule J for
figuring the taxonthisincome). . .. ..... +++) +--+ eee ees eee ee