97. Rufus and Rhonda arc a married couple with 3 dependent children, all under 16 years of age. Rufus, 46, is an exccutive with Plowshare Corporation. Rhonda, 39, is a self employed attoney Rafus reccives an annual salary of $78,000. He paricipates in Powshare's qualicd pcnuon plan by antribuing 4% of his annual salary, which is makhol by Plowshare. Rufus also receives group tcrm life insurance at twice his annual salary The coverage costs Plowshare $2,100. All employccs are coverod by a medical in surance policy. (Rufus's policy costs $2,300.) He also participatcs in the company's lexible bencfits plan by paying $200 per month into the plan. During the year Rufus submits daims totaling $1 800 to the plan. An addiional benclit that only top level exccutives such as Rufus cnjoy is the payment of $2,300 in country club dues by PMowshare. Although Rufus occasionally entertains dients at the dub, his primary use ofthe facility is penonal. Rhonda bills clients a total of $125,000 for scrvices rendered during the cur rent year. She reccives $17,000 in paynents from billings in prior years and $87,000 from current-year billings. Rhonda pays the following expenses relatcd to her legal practice Olfice rent Secretary'ssalary Withhoklings from secrctary's salary $14,400 24,000 Foderal income taxes $2,250 State income taxcs 1,836 4,606 1,836 4,000 ,1ss Matching Social Sccurity tax payment Fat Entcrtainment costs Scminar costs Insurance on buikling-2 years prepaid on August I Supplics Bar association ducs State licensing lee Automobile costs Business gifis Salary paid to Rhond Salary puid to Rhonda's son In addition to these out of pocket costs, Rhonda determines that $2,400 a 1500 2,250 600 725 4,700 8so 64,000 2,500 previous years" billings are uncollectiblc accounts reccivable from The antertainment costs consist of the following Dues to social dub Meals while discussing cases with clicnts Open housc $1,000 1,200 1,800 Rhonda has records that show that shc usa the club 70% ofte time frater. tainment directly related to business, 10% fr entertainnat awxiated with bcr businca, and 20% fr pemanal purpaa. The epen house costs corwa? of$1,400 for fxxl and $400 G" a jazz comabo at a remtin she hosted ?r dients when she Rhonda uses her automobile extensively in her busincs. She keeps a log to re- cord busines milcs and related cuts. Her reaords show that she drove 10,000 busincas milcs and 3,000 pesonal miles during the current year. In past yeans, she moved into her new oflices this year any of the $26,000 cont of the automohile she purchased 2 yeans app-she has clients a gift to thank them for thcir s her actual casts, Accondingly, her reconds indicate that she has never depeeciated land mileage rate method 97. Rufus and Rhonda arc a married couple with 3 dependent children, all under 16 years of age. Rufus, 46, is an exccutive with Plowshare Corporation. Rhonda, 39, is a self employed attoney Rafus reccives an annual salary of $78,000. He paricipates in Powshare's qualicd pcnuon plan by antribuing 4% of his annual salary, which is makhol by Plowshare. Rufus also receives group tcrm life insurance at twice his annual salary The coverage costs Plowshare $2,100. All employccs are coverod by a medical in surance policy. (Rufus's policy costs $2,300.) He also participatcs in the company's lexible bencfits plan by paying $200 per month into the plan. During the year Rufus submits daims totaling $1 800 to the plan. An addiional benclit that only top level exccutives such as Rufus cnjoy is the payment of $2,300 in country club dues by PMowshare. Although Rufus occasionally entertains dients at the dub, his primary use ofthe facility is penonal. Rhonda bills clients a total of $125,000 for scrvices rendered during the cur rent year. She reccives $17,000 in paynents from billings in prior years and $87,000 from current-year billings. Rhonda pays the following expenses relatcd to her legal practice Olfice rent Secretary'ssalary Withhoklings from secrctary's salary $14,400 24,000 Foderal income taxes $2,250 State income taxcs 1,836 4,606 1,836 4,000 ,1ss Matching Social Sccurity tax payment Fat Entcrtainment costs Scminar costs Insurance on buikling-2 years prepaid on August I Supplics Bar association ducs State licensing lee Automobile costs Business gifis Salary paid to Rhond Salary puid to Rhonda's son In addition to these out of pocket costs, Rhonda determines that $2,400 a 1500 2,250 600 725 4,700 8so 64,000 2,500 previous years" billings are uncollectiblc accounts reccivable from The antertainment costs consist of the following Dues to social dub Meals while discussing cases with clicnts Open housc $1,000 1,200 1,800 Rhonda has records that show that shc usa the club 70% ofte time frater. tainment directly related to business, 10% fr entertainnat awxiated with bcr businca, and 20% fr pemanal purpaa. The epen house costs corwa? of$1,400 for fxxl and $400 G" a jazz comabo at a remtin she hosted ?r dients when she Rhonda uses her automobile extensively in her busincs. She keeps a log to re- cord busines milcs and related cuts. Her reaords show that she drove 10,000 busincas milcs and 3,000 pesonal miles during the current year. In past yeans, she moved into her new oflices this year any of the $26,000 cont of the automohile she purchased 2 yeans app-she has clients a gift to thank them for thcir s her actual casts, Accondingly, her reconds indicate that she has never depeeciated land mileage rate method