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retained some of the cash for his personal use. Nick did not
record the amounts he kept for himself in his ledger books.
Petitioners did not maintain a personal checking account.
During 1990, 1991, and 1992, petitioners' stores sold beer
by the case (both 24-can and bottle cases and 30-can and bottle
cases), multiple cases, 12-packs, 6-packs, 40-ounce bottles and
cases, 32-ounce bottles and cases, and half-barrel and quarter-
barrel sizes. Nick's Liquors also sold single 12- and 16-ounce
cans of beer. All three stores sold warm beer from the floor and
cold beer from large coolers in each store. Nick's Liquors sold
liquor in cases and individual bottles in a variety of sizes,
ranging from 1.75 liter (L), 1 L, 750 milliliters (mL), 375 mL,
200 mL, down to 50-milliliter miniatures. Nick's Liquors also
sold wine, both warm and cold, in a variety of sizes and sold
cigarettes by the 30-carton case, by the 10-pack carton, by
multiple cartons, and by the pack.
In general, petitioners' profit margins were larger on sales
of the smaller sizes, whether they were sales of beer, liquor, or
cigarettes. For example, cigarettes sold by the pack were marked
up by an additional nickel per pack from their carton price.
Petitioners also sold cold beer from their stores' large coolers
at a higher price than warm beer.
Nick's Liquors was a high-volume, low-priced retail
operation. It was Nick's Liquors' practice to sell a high volume
of a limited number of brands and sizes of beer and liquor at low
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