Class $7$ In$-$Class problemsProblem $1$Part $1$: Sally was an all$-$state soccer player during her junior and senior years in high school. She accepted an athletic scholarship from State University. The scholarship provided the following:Tuition and Fees $$15,000$Housing and Meals $6,000$Books and Supplies $1,500$Transportation $1,200$What is the effect of the scholarship on Sallys gross income?Part $2$: Sallys brother Willy received $$8,000$ from their fathers employer as a scholarship during the year. As part of their compensation packages, the employer grants the children of all executives a scholarship equal to one$-$half of annual tuition, fees, books, and supplies. Willy also received a $$6,000$ scholarship $($to be used for tuition$)$ as the winner of an essay contest related to bioengineering, his intended field of study. Determine the effect of the scholarships on Willys and his fathers gross income.Problem $2$Determine the gross income of the beneficiaries in the following cases:a$.$ Justins employer was downsizing and offered employees an amount equal to one years salary if the employee would voluntarily retire. His annual salary is $$100,000.$b$.$ Trina contracted a disease and was unable to work for six months. Because of her dire circumstances, her employer paid one$-$half of her annual salary while she was away from work.Her annual salary is $$50,000.$Problem $3$Billy fell off a bar stool and hurt his back. As a result, he was unable to work for three months. He sued the bar owner and collected $$100,000$ for the physical injury and $$50,000$ for the loss of income. In addition, he received $$350,000$ in punitive damages from suing the bar and collected $$15,000$ from an income replacement policy he purchased. Amber was away from work for three months following heart bypass surgery. Amber collected $$30,000$ under an income replacement insurance policy purchased by her employer $($no premiums paid by her employer were included in her income$).$What are the effects on gross income for Amber and Billy?Problem $4$The Sage Company has the opportunity to purchase a building located next to its office. Sage would use the building as a daycare center for the children of its employees and an exercise facility for the employees. Occasionally, portions of the building could be used for employees family events such as reunions, birthday parties, and anniversaries. Will the use of the building qualify as an excluded fringe benefit for the companys employees? Why?Discussion question: In each of the problems consider something that could have caused the taxpayer to have a better outcome $($bigger exclus