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Petitioners kept a depreciation schedule for the animals
purchased for breeding and the improvements made on the land.
However, Mrs. Knudsen admitted that the depreciation schedule
contained errors. For example, Mrs. Knudsen testified that
petitioners owned two blue and gold macaws, but only one was
included on the depreciation schedule.
In addition to their accounting records, petitioners kept
some operational records for their breeding activity. Mrs.
Knudsen maintained a daily journal, a calendar of bird breeding
activity, and a large notebook of breeding records. The daily
journal was a calendar that was kept near the entrance of the
building, on which employees documented daily events such as
weather temperatures, births, deaths, workers present, chores of
the day, and deliveries of feed and fuel. The bird calendar was
kept in petitioners’ kitchen and included information on the bird
breeding activity. The bird calendar helped petitioners
determine when the birds would lay eggs and when the eggs would
hatch.
The large notebook of breeding records contained information
such as names of sellers, dates of purchase, purchase prices, and
breeding information. The breeding records did not identify the
species of animal, and many of the breeding records were
incomplete. Petitioners did not maintain breeding records for
all of their animals. For example, petitioners did not keep
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