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1982, supra table 5, payments by Kenmore to the refineries for
the fuel charged by Broskin are included in Kenmore’s purchases
for its fiscal 1981 and fiscal 1982. Supra table 6. As a
result, amounts deposited into Kenmore’s Account that came from
Broskin are offset by payments from Kenmore’s Account to the
refineries for fuel charged by Broskin, and thus the amounts
deposited into Kenmore’s Account that came from Broskin are
properly includable in Kenmore’s gross receipts and do not
explain Kenmore’s unreported income.
This may be illustrated by a transaction to which Bohn
testified. Kenmore’s one-write records show that on December 1,
1981, Kenmore wrote a check to American Refining Group, Inc., in
the amount of $53,887.70. Evidently, the original bill was in
the amount of $54,432, and Kenmore took advantage of a one-
percent discount ($544.30) for timely payment. The one-write
records show a December 1, 1981, $54,432 deposit to Kenmore’s
Account. Evidently, Broskin paid $54,432 to Kenmore, which
amount was deposited into Kenmore’s Account. Although the bank
deposits method may arguably be said to overstate Kenmore’s gross
receipts by $54,432, this is offset by the Kenmore payment to
American Refining Group, Inc., which (under that line of
reasoning) overstates Kenmore’s cost of purchases by $53,887.70.
Under the bank deposits method as applied in the instant cases,
see supra tables 4 through 7, only $544.30 of taxable income
results from the above-described transaction; that is the correct
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