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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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