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for the corresponding years. These numbers indicate that
accounts receivable were 38 percent of gross sales at the end of
1993, 28 percent of gross sales at the end of 1994, and 35
percent of gross sales at the end of 1995. In the absence of
more convincing evidence, we believe that respondent’s accounts
receivable figures are reasonable.
Petitioners contend that respondent never asked Jack about
1992 accounts receivable and that respondent’s inclusion of
$9,000 accounts receivable in their 1993 opening net worth is
therefore arbitrary and without basis, thereby rendering the net
worth analysis invalid. Respondent’s inclusion of accounts
receivable in petitioners’ 1993 opening net worth operates to
their detriment only insofar as respondent has understated the
amount. Petitioners do not argue, and the evidence does not
indicate, that petitioners had any amount of accounts receivable
at the end of 1992. Hence, petitioners have not established that
the $9,000 accounts receivable that respondent has included in
their 1993 opening net worth is understated. Indeed, given that
petitioner acquired Murphy’s in December 1992, it seems likely
that accounts receivable as of December 31, 1992, would be small
in amount.
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