An employee is given a $10,000 interest free loan from an employer on January 1 to purchase

Fantastic news! We've Found the answer you've been seeking!

Question:

An employee is given a $10,000 interest free loan from an employer on January 1 to purchase an automobile to be used for employment purposes. Due to a serious illness, the automobile is only used for nine months of the year. Assume that the prescribed interest rate is 2% for the entire year.

Calculate her taxable benefit as it relates to her interest free loan, if the employee re-pays $1000 of her loan on September 30^th.
Does the employee need to include a standby charge and operating cost benefit in their taxable income, in this scenario? Briefly explain your answer.

Posted Date: May 18, 2024 04:03 PM

See More Questions

A small ice block of mass m starts from rest from the top of an inverted bowl in the shape of a hemisphere, as shown in the figure. The hemisphere is fixed to the ground, and the block slides without...
With regard to accounting for private, not-for-profit health care entities, do the following: a. Outline the accounting required, under FASB guidance, for a(n): (1) Endowment gift received in cash....
Heartland Inc. is a medium-size company that has been in business for 20 years. The industry has become very competitive in the last few years, and Heartland has decided that it must grow if it is...
It has been argued that to be classified as a professional one must offer services to the public rather than simply be an employee of an organization. As such, most employees of an organization,...
Hudson Corporation is considering three options for managing its data processing operation: continuing with its own staff, hiring an outside vendor to do the managing (referred to as outsourcing), or...
The knowledge, education, training, skills, and expertise of a firm's workers are known as Question 1 7 options: a ) management's philosophy. b ) human capital. c ) cultural diversity. d ) physical...
Linda Fashion operates three departments: Men's, Women's, and Accessories. Departmental operating income data for the third quarter of 2018 are as follows: Linda Fashions Product Line Contribution...
= Obara notices a kitten sitting on the ledge of a building, a height h 22 m off the ground. When the kitten loses its footing and begins to fall straight downward from rest, Obara sprints toward the...
Explain how if rewards in the labor market differ in the United States versus another country how this can result in migration associated with positive or negative selection. This answer will require...
If || b|| = || + b||, show that a and b are orthogonal vectors.
The following selected transactions apply to Topeca Supply for November and December Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to...
Suppose you're on a cruise ship and encounter foul weather; the water's surface has high-amplitude waves. Unfortunately, you have a history of vomiting profusely when bobbing up and down at a...
On January 1, 20X3, Sterling granted stock options to senior executives that enable them to purchase 80,000 shares. The exercise price was $85 per share, which was the same as the market price on the...
Would you use the adjacency matrix structure or the adjacency list structure in each of the following cases? Justify your choice. a. The graph has 10,000 vertices and 20,000 edges, and it is...
If a service department generates revenues, how do these revenues enter into the allocation of the department's costs to other departments?
What guidelines should govern the allocation of fixed service department costs to other departments? The allocation of variable service department costs ?
"A variable allocation base should never be used in allocating fixed service department costs to operating departments." Explain.

An employee is given a $10,000 interest free loan from an employer on January 1 to purchase

Question:

Expert Answer:

Students also viewed these accounting questions