A business entity's taxable income before the cost of certain fringe benefits paid to owners and other employees is $41,600. The amounts paid for these fringe benefits are reported as follows.Note the following: (1) Assume the fringe benefit plans are not discriminatory and (2) The business entity is equally owned by three owners. OwnersOther EmployeesGroup term life insurance$4,400 $7,270 Lodging incurred for the convenience of the employer2,930 4,680 Qualified retirement plan2,500 5,620 a. Calculate the taxable income of the business entity if the entity is a partnership, a C corporation, and an S corporation.The taxable income of the business entity, if it is a partnership, is $____________. If the entity is a C corporation, it is $_______________, and if the entity is an S corporation, it is $_____________.

Taxable income refers to an income that is obtained after making adjustments of deductions and…

Answered: A business entity's taxable income…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A business entity's taxable income before the cost of certain fringe benefits paid to owners and other employees is $41,600. The amounts paid for these fringe benefits are reported as follows.

Note the following: (1) Assume the fringe benefit plans are not discriminatory and (2) The business entity is equally owned by three owners.

	Owners	Other Employees
Group term life insurance	$4,400		$7,270
Lodging incurred for the
convenience of the employer	2,930		4,680
Qualified retirement plan	2,500		5,620

a. Calculate the taxable income of the business entity if the entity is a partnership, a C corporation, and an S corporation.

The taxable income of the business entity, if it is a partnership, is $____________. If the entity is a C corporation, it is $_______________, and if the entity is an S corporation, it is $_____________.

Definition Definition Benefits in addition to compensation that companies give to their employees. Fringe benefits can boost morale and productivity and keep employees motivated. Companies often use fringe benefits as a competitive advantage to recruit and retain employees. Examples of fringe benefits include pensions, vacation time, tuition reimbursement, free or subsidized meals, and gym memberships.

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