Western American Airlines (WAA) & Claire Income Tax Case Study Accounting Assignment Help

Assignment Task

1. The Dunphys do not have any foreign bank accounts or trusts.
2. Claire is a flight attendant for Western American Airlines (WAA), where she earned $57,000 in salary. WAA withheld federal income tax of $6,375, state income tax of $1,800, Los Angeles city income tax of $675, Social Security tax of $3,600, and Medicare tax of $825.
3. Phillip and Claire received $300 of interest from State Savings Bank on a joint account. They also received a qualified dividend of $395 on jointly owned stock in Xila Corporation.Page C-7
4. Phillip’s full-time real estate business is named “Phillip Dunphy Realty.” His business is located at 645 Grove Street, Los Angeles, California 90018, and his employer identification number is 93-3488888. Phillip’s gross receipts during the year were $730,000. Phillip uses the cash method of accounting for his business. Phillip’s business expenses are as follows:

• Advertising $ 5,000
• Professional dues 800
• Professional journals 200
• Employee wages 48,000
• Insurance on office contents 1,120
• Accounting services 2,100
• Miscellaneous office expense 500
• Utilities and telephone 3,360
• Payroll taxes 3,600
• Depreciation To be calculated

5. On March 20, Phillip moved his business out of the old offices at 1103 Allium Lane into a newly constructed and equipped office on Grove Street. Phillip sold the old office building and all its furnishings. Phillip’s expenditures for the new office building are as follows:
Date Acquired Asset Cost

• 3/20 Land $ 300,000
• 3/20 Office building 2,500,000
• 3/20 Furniture 200,000
• 4/1 Computer system 350,000
• 6/1 Artwork 150,000

6. Phillip computes his cost recovery allowance using MACRS. He would like to use the §179 immediate expensing, but he has elected to not claim any bonus depreciation. Phillip has never claimed §179 or bonus depreciation before. The assets Phillip sold on
March 20 are as follows:

• Date
• Acquired Asset Sales
• Price
• Original
• Cost
• Accumulated Depreciation as of Beginning of the Year

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