Determine the tax consequences to the employee of the following fringe benefits. (a) A bottle of ketchup
Question:
Determine the tax consequences to the employee of the following fringe benefits.
(a) A bottle of ketchup sells for $6.00 at retail. Heinz makes $5.00 of profit on each bottle. Heinz plans to offer ketchup to all employees for 25 cents per bottle.
Amount Excluded from Employee’s Income: ________________
Amount Included in Employee’s Income: ________________
(b) Heinz plans to offer all employees free transit passes (worth $310 per month).
Amount Excluded from Employee’s Income: ________________
Amount Included in Employee’s Income: ________________
(c) Steve is the Chief Executive Officer at Heinz. Holly is Steve’s wife. Every Christmas, Steve asks his personal assistant to shop for a gift for Holly. The assistant spends two hours shopping for the gift. The assistant is an hourly employee who makes $40 per hour.
Amount Excluded from Employee’s Income: ________________
Amount Included in Employee’s Income: ________________
Payroll Accounting 2018
ISBN: 978-1259742514
4th edition
Authors: Jeanette Landin, Paulette Schirmer