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Jack’s conclusory testimony does not credibly establish the
amount of petitioners’ accounts receivables. His credibility in
this regard is undermined by petitioners’ admission that Jack
gave respondent’s agent different accounts receivable figures
during the examination and only came up with the new figures
shortly before trial. Petitioners seem to invite us to rummage
through their boxes of records, calculator in hand, and replicate
Jack’s calculations. This we decline to attempt.
Even if we were to assume, for sake of argument, that Jack
has correctly tallied gross accounts receivable figures reflected
in petitioners’ records, we still would be unconvinced that his
figures accurately reflect petitioners’ net accounts receivable.
Petitioners contend, based solely on Jack’s testimony, that the
receivables should have been discounted by 60 percent to reflect
bad debts and repossessions. Apparently, Jack’s figures reflect
such a 60-percent discount. Petitioners have not substantiated
the reasonableness or appropriateness of such a discount.8
Although the record is unclear on this point, it appears
that the net accounts receivable figures used in respondent’s net
worth analysis were derived from information that Jack conveyed
8 We do not quite comprehend petitioners’ argument that
these accounts receivable should be reduced both for bad debts
and for repossessions. We understand the theoretical reduction
of those accounts to represent bad debts, and as petitioners
acknowledge, respondent has in fact made a minor reduction in the
figures used to reflect some uncollectibility. We do not
understand, however, why accounts receivable should be reduced
for repossessions without making a corresponding increase to
inventory.
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