Philip E. Parsons and Karen Parsons - Page 4




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          the SMR partner responsible for petitioners’ and Cedar Hill’s               
          accounts.                                                                   
               SMR supplied petitioners with forms for the purpose of                 
          recording cash transactions in Cedar Hill’s operations.  These              
          forms were titled “Daily Sales and Cash Report” and were referred           
          to as “pink sheets”.  The pink sheets provided a means of                   
          recording different categories of cash receipts and disbursements           
          so that petitioners and SMR could account for Cedar Hill’s cash.            
          The cash disbursement categories included a line denoted                    
          “Personal Drawing” for recording cash withdrawn by Mr. Parsons              
          for personal use.  The pink sheets also had a line for recording            
          the amount of cash deposited into Cedar Hill’s bank account.  Mr.           
          Parsons understood the “Personal Drawing” line to be a place for            
          recording money taken out of the register during the course of              
          the day for personal use.                                                   
               At the end of each business day, Mr. Parsons brought home              
          the register tapes, cash, and receipts from the cash registers at           
          Cedar Hill and gave them to Mrs. Parsons, who then completed the            
          pink sheet record for that day.  By comparing the cash and the              
          register tapes from each cash register and shift, it could be               
          determined whether each cashier was properly accounting for his             
          or her cash receipts.  Each morning, Mr. Parsons would take the             
          cash that Mrs. Parsons had counted in preparing the pink sheets             
          the previous evening, so he could deposit it in Cedar Hill’s bank           





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