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the 1988 bank statements from the nursery bank account, yearend
summary, yearend balance sheet, and profit and loss statements.
The financial statements were reports generated from the
nursery's computer. Davidson was not aware of any cash
expenditures by the nursery.
Dozier was the nursery employee who served as Davidson's
contact. Dozier supplied Davidson with a handwritten list of the
deposits into the nursery bank account and the supporting deposit
slips. Both Mr. Gandy and Dozier told Davidson that the deposits
that were identified as being from Burnice Gandy were loans;
these deposits totaled $217,500. They also identified other
purportedly nontaxable amounts, such as loans from PCA or
insurance proceeds.
The 1988 bank statements from the nursery bank account were
used by Davidson to compute the gross receipts of the nursery for
1988. Davidson compared the book amount of gross receipts to the
amount of the bank deposits, excluding those deposits that were
identified as loans or other nontaxable amounts, and used the net
deposits, which was the higher amount. Davidson was not aware of
any deposits of nursery receipts being made into any bank
accounts other than the nursery bank account, nor was he aware of
any checks to the nursery being cashed.
Mr. Gandy represented to Davidson that Mrs. Gandy had
received the mortgage notes in the divorce property settlement
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