Darryl Shawn and Melonee Yevette Bundridge - Page 14

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          of goods sold, respondent asserted that petitioners had gross               
          receipts in 1993 of $102,000, as stated in the 1993 amended                 
          return (a markup of 66.5 percent).                                          
               Petitioners argue that respondent's markup percentage is               
          excessive.  They assert that the sale price and markup percentage           
          were as follows:                                                            
                                   Sale Price     Markup Percentage                   
               Compact discs       $11.99              15%                            
               Cassettes           7.99                15%                            
               Cassette singles    2.49                25%                            
               Records             4.99                25%                            
               Overall average                         20%                            
          In support of this, petitioners point to Mr. Ginsburg's testimony           
          regarding the typical sale price of music products.  He stated              
          that the typical list prices for "release products on sale" were:           
                         Compact discs       $11.99/12.99                             
                         Cassettes           $7.98/8.98                               
               In evaluating petitioners' conclusion that the overall                 
          markup percentage is 20 percent, we begin with their asserted               
          sale price.  Petitioners attempted to establish their sale price            
          by Mr. Ginsburg's testimony regarding the typical price for                 
          release products on sale, and by receipts from Target,                      
          Blockbuster Music, and Circuit City.  However, Mr. Ginsburg                 
          stated he had no knowledge of what petitioners were actually                
          selling their products for, and petitioners presented no evidence           
          regarding the prices they sold the products for.  We are not                
          persuaded of the accuracy of petitioners' stated sale prices.  We           



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