Pediatric Surgical Associates, P.C. - Page 11




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                         Dr. Ellis      $351,120.98                                   
                         Dr. Mann       519,396.47                                    
                         Dr. Black      592,821.01                                    
                         Dr. Miller     772,752.38                                    
                         Dr. Vaughan    125,467.35                                    
                         Dr. Snyder      4,338.96                                     
          Taxable Income                                                              
               For 1994, on gross receipts of $2,080,008, petitioner                  
          reported taxable income of $29,255.  For 1995, on gross receipts            
          of $2,405,718, petitioner reported taxable income of $49,323.               
               On its Forms 1120 for the audit years, petitioner reported             
          the following deductions (other than compensation of officers):             
                                             1994             1995                    
               Salaries and wages            $233,403       $273,524                  
               Repairs and maintenance       3,329          8,930                     
               Rents                         62,353         57,954                    
               Taxes and licenses            52,013         64,176                    
               Interest                      2,278          174                       
               Contributions                 3,251          5,480                     
               Depreciation                  33,398         27,592                    
               Pension, etc.                 138,207        134,917                   
               Other deductions*             238,032        268,867                   
          *The largest items were insurance, $135,770 and $113,889, for               
          1994 and 1995, respectively.                                                
          Assets                                                                      
               Balance sheets prepared for petitioner for the audit years             
          show the following assets:                                                  
                                        1994                1995                     
               Current assets                                                         
              Cash in banks       $30,797             $6,894                         
               Property and equipment                                                 
              Office equipment         139,110        148,451                        
              Accum. depr.        (108,215)           (124,609)                      
              Leasehold improv.        39,820              41,073                    
               Accum. amort.       (28,658)            (29,064)                       





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