K & M La Botica Pharmacy, Incorporated, et al. - Page 33

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          Ahmed’s 1995          Gross Income   Taxable Income  Tax Liability          
          As Stipulated         $113,390        $87,262          $19,367              
          As Reported               49,000         22,872         3,431               
          Understatement        $ 64,390        $64,390          $15,936              
          % Understatement     57%             74%           82%                      
          Ahmed’s 1996                                                                
          As Stipulated        $95,698          $70,325          $14,478              
          As Reported               40,500         15,127         2,269               
          Understatement        $55,198         $55,198          $12,209              
          % Understatement     58%             78%              84%                   
          Ahmed’s 1997 (Collapsed)                                                    
          As Stipulated         $2,557,113       $402,378        $133,652             
          As Reported             2,562,506        181,236       36,896               
          Understatement      ($    5,393)       $221,142        $ 96,756             
          % Understatement      0%              55%             72%                   
          Ahmed’s 1998 (Collapsed)                                                    
          As Stipulated       $6,277,825       $2,255,213       $866,668              
          As Reported           5,493,205      940,834          257,153               
          Understatement      $784,620         $1,314,379       $609,515              
          % Understatement    12%            58%          70%                         

               Based on the stipulated income and expense figures, the                
          schedule below reflects our calculation of the dollar amounts of,           
          and the percentages for, the understatements of gross income, of            
          taxable income, and of estimated tax liability that occurred on             
          each of K & M’s 1995 and 1996 corporate Federal income tax                  
          returns.                                                                    
















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