MOVIES: Cannon Runs Low on Ammo

Only a year ago Cannon Group provoked sneers -- and envy -- in Hollywood with such low-brow but high-profit films as Death Wish 3 and Breakin'. Now the studio is a fallen star. Cannon is slashing its production schedule this year by more than 65%. The studio last month narrowly avoided filing for bankruptcy because of its debt load, which reached $200 million at the end of 1985. Warner Communications at least temporarily rescued the studio by investing $75 million in exchange for a 23% stake in Cannon stock and $25 million worth of company bonds.

Cannon has been suffering from a sudden dearth of box-office hits, but that may not be its most serious problem. Critics charge that its past success may have resulted partly from questionable accounting practices, and the Securities and Exchange Commission is currently looking over Cannon's books.