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year of operations, to reflect the number of animals in the
partnership's flock at yearend as the number of animals initially
acquired by it.
Mr. Hoyt's above testimony is not consistent with the
accounting treatment accorded RCR #1, RCR #2, and RCR #3 in the
prior annual flock recap sheets. With respect to RCR #1, RCR #2,
and RCR #3, Mr. Hoyt maintained that it had been his
organization's practice not to account for events such as culls,
deaths, and disappearances during each of those partnership's
first year of operations. The 1981, 1982, and 1983 flock recap
sheets, in fact, reflect each partnership as owning, as of the
end of its first year of operations, the same number of animals
specified in its bill of sale. See infra Appendix F.
Moreover, this accounting treatment is completely contrary
to standard accounting principles because these flock recap
sheets show each partnership's breeding flock to have had no
lambs born, no sheep culled, and no deaths or disappearances. It
is extremely unlikely that the alleged breeding flock each of
these partnerships purportedly acquired would, in fact, have
produced no lambs during that partnership's first year of
operations. RCR #1 entered into its transaction with Barnes
Ranches to acquire 401 breeding sheep on April 20, 1981; RCR #2
entered into its transaction with Barnes Ranches to acquire 514
breeding sheep on February 15, 1982; RCR #3 entered into its
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