Question: Priscilla, an employee of Choice Corporation, has an annual salary of $70,000. Choice has a cafeteria plan that allows all employees to choose an amount

Priscilla, an employee of Choice Corporation, has an annual salary of $70,000. Choice has a cafeteria plan that allows all employees to choose an amount equal to 8 percent of their annual salary from a menu of nontaxable fringe benefits or to take cash. Priscilla selects $50,000 of group term life insurance that costs the company $900 and also selects health insurance that costs the company $2,000; she takes the remaining $2,700 in cash. How much compensation income does Priscilla recognize from Choice Corporation?

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