Charles A. and Marian L. Derby, et al. - Page 64




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          by respondent's counsel, Dr. Kennedy testified as follows                   
          regarding the contents of the letter and the P & L statement:               
               Q    Would you look at Exhibit 629-J please?  Do you                   
                    recognize this?                                                   
               A    I think it's a letter I wrote to my accountant it                 
                    looks like, at least the first of it.                             
               Q    Okay.  And then there's a lengthy paragraph on the                
                    bottom of the page, which you know, as we get two-thirds          
                    of the way down it states, "I have collected 23,037 for           
                    November and December."  Do you see that?                         
               A    Yes.                                                              
               Q    Okay.  And then would you look at Exhibit 631-J                   
                    please?                                                           
               A    Yes.                                                              
               Q    Which is your profit and loss statement through the               
                    end of October '94?                                               
               A    Um-hmm.                                                           
               Q    So it says, "Income Patient Fees Year To Date $176,002.”          
                    That would have been what you collected through that              
                    point in time?                                                    
               A    (No audible response).                                            
               Q    So then if we add the 176,000 to the 23,000, we get               
                    about 199,000.  So that would have been your income for           
                    the year?                                                         
               A    I suppose.                                                        
               We accept the foregoing exchange as a concession by Dr.                
          Kennedy that his November and December 1994 collections totaled             
          at least $23,000 and a concession by respondent that Dr. Kennedy's          
          total 1994 Schedule C gross receipts totaled $199,000, not                  
          $199,469, an increase of $3,291 over the $195,709 Dr. Kennedy               
          reported.  Therefore, we sustain respondent's proposed increase in          
          Dr. Kennedy's 1994 Schedule C income to the extent of $3,291.               
               B.  The Derbys                                                         
               1.  Background                                                         









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