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1990 1991
Gross receipts or sales $1,264,701 $2,849,451
Cost of goods sold 1,123,852 2,661,781
Gross profit 140,849 182,670
Salaries and wages $6,604 $10,638
Guaranteed payments
to partners 30,000 30,000
Rent 2,652 6,000
Interest 18,257 16,721
Taxes 1,132 1,629
Repairs 1,619 3,692
Depreciation 1,079 1,186
Other deductions 32,302 65,851
Total deductions 93,644 135,717
Ordinary income (loss) 47,205 46,953
Mr. Dawson, the partnership's accountant, computed the
gross receipts of the partnership for Federal income tax
purposes based on the aggregate deposits made to Beaufort
Leaf's bank account, less certain deposits identified as
repayments of loans or cash advances. Mr. Dawson computed
Beaufort Leaf's cost of goods sold for 1990 and 1991 based
on canceled checks and some accounting adjustments. His
computation of the cost of goods for each year is as
follows:
1990 1991
Inventory at beginning of year $199,602 $132,914
Purchases 1,057,163 2,713,562
Other costs (wholesale commissions)-0- 47,429
Total 1,256,765 2,893,905
Inventory at end of year 132,914 227,124
Cost of goods sold 1,123,851 2,666,781
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Last modified: May 25, 2011