Wy'East Color, Inc. An Oregon Corporation - Page 6

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                                                       Taxable Income                 
               Fiscal                                  Before Certain                 
               Year      Gross Sales      Assets         Adjustments                  
               1989      $8,644,356     $4,119,578     $774,054                       
               1990      10,283,552     5,106,452      1,154,903                      
               1991      12,904,812     5,443,713      1,663,073                      
          B.   The Cummings Family                                                    
               Mr. Cummings is married to Karen R. Cummings (Mrs.                     
          Cummings).  Their children are Grant, Bruce, Dwight D. (Deen),              
          Karen Ann, and Cynthia, who is married to Jim Medding (Medding).            
               1. Mr. Cummings                                                        
               Mr. Cummings lived in Redmond, Washington, during the years            
          in issue.  Mr. Cummings knew the technology that affected                   
          petitioner's business.  He was president and a director of                  
          petitioner; Dacor, Inc. (Dacor), petitioner's management company            
          (see par. C-1, below); and Lasercolor, Inc. (Lasercolor), another           
          photographic processing business (see par. D, below).  He had               
          offices at petitioner's Portland facility and at Lasercolor's               
          Bellevue, Washington, facility, near Seattle.  Mr. Cummings did             
          not keep records of how much time he worked for petitioner or               
          Lasercolor.  He was a shareholder and officer of Kadac, Inc.                
          (Kadac), petitioner's management company that succeeded Dacor               
          (see par. C-2, below).  He reported on Kadac's income tax return            
          that he devoted all of his time to Kadac.  He attended some of              
          petitioner's weekly management meetings.  He helped decide which            
          equipment petitioner would buy for the color lab.  Mr. Cummings             
          served on the boards of the International Prepress Association              




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