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chemotherapy drugs without purchasing petitioner's service. We
find nothing in the case of Wilkinson-Beane, Inc. that would
cause us to believe that the taxpayer's services there depended
on the purchase of caskets from it. Instead, the taxpayer in
Wilkinson-Beane, Inc., by choice, sold the funeral services and
caskets as a package.
Respondent also relies on Knight-Ridder Newspapers, Inc. v.
United States, 743 F.2d 781 (11th Cir. 1984). There, the Court
of Appeals for the Eleventh Circuit considered whether the
taxpayer, who produced and sold newspapers, was required to keep
inventories. The taxpayer argued that it was a service business
in that it provided information for its readership and
advertisement for its clients. The court found that even though
the taxpayer sold an extremely perishable commodity (a 2-day-old
newspaper is stale) and had no inventory of finished goods, the
taxpayer was required to account for inventories because the
newspapers were merchandise and there was a significant
fluctuation of newsprint and ink on hand.
The facts of Knight-Ridder Newspapers, Inc. v. United
States, supra, are materially distinguishable from the facts at
hand. In contrast to the instant case, the taxpayer in Knight-
Ridder, Inc. clearly manufactured a product (newspapers) and used
raw materials (paper and ink) in the manufacturing process. We,
like the Court of Appeals for the Eleventh Circuit, find
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