On this basis, the Dykes say they bought the business for $400,000 plus $35,000 for the stock in April 2007.
Shortly after securing the sale Cervino Holdings Ltd (CHL) went into voluntary liquidation.
On Tuesday, self-employed accountant Kevin McFadden of Bay Taxation Services, who prepared a set of financial documents for Colosimo in relation to CHL's trading performance for the period February to September 2005, gave evidence. He said the second set of documents presented to the Dykes by the accused did not "remotely represent" those he had created.
The letterhead used with the November document was not authorised by him and the before-tax net profit figure was two-and-half times higher than the $82,120 he had recorded, he said.
A November set of financial documents was prepared by accountants L B Dawson & Associates after meetings with Colosimo and his office manager.
Principal Jason Manning gave evidence yesterday that the document on Bay Taxation Service letterhead provided to the Dykes was not a true representation of the financial document he had provided to the accused company in January 2006.
Forensic accountant Jason Weir, who works for Deloittes and manages a team of accountants who investigate business fraud, also gave evidence that after analysing the "November financials" and cashbook summary he concluded the documents alleged given to the Dykes were fictitious.
Mr Weir said that in reaching that conclusion he had compared the two sets of financial documents and reconciled them with company records and supporting documents such as invoices.
While the document prepared by Mr McFadden was able to linked back to the Cervino Holdings cashbook records, the November documents were not based on the underlying financial records for the company.
The level of sales was $100,000 higher and the net profit was also exactly $100,000 higher in the copy of the Dawson's own financial document and the accounts payable figure was also way too low.
When asked to comment on the private valuation obtained by the Dykes in February 2007 of $583,000, Mr Weir said it had been assessed on the business being a profitable, viable business.
Cervino Holdings, however, was "deeply unprofitable and clearly insolvent" and its value would been vastly lower than the $400,000 the Dykes paid for it.
He said there were signs the company was in trouble as early as November 2005 as the business was realising very low profits and was operating on an overdraft of over $100,000.
When the Dykes took over the Kestrel in April 2007, Colosimo's company was six months behind on PAYE obligations and bank statements showed a large number of honour and dishonour fees for cheques, he said.
After it stopped trading, Cervino Holdings owed $1.2 million to its creditors and even taking into account the $250,000 the Dykes paid to buy the business assets the net effect was still a shortfall of $1million and the creditors would have lost 80 cents in the dollar they were owed.
Mr Dyke gave evidence on Monday that had they seen the true financial figures, he and his wife would have never bought the business.
Their business was placed into voluntary liquidation in June 2008. The trial continues today.
