(a) Nike sells Air Jordans to customers for $180. Each pair of shoes costs Nike $45 to produce. Employees can buy Air Jordans for $30. Amount Excluded from Employee's Income: Amount Included in Employee's Income: (b) Supercuts plans to offer haircuts to employees for free. Employees can get their hair cut whenever a customer fails to show up for an appointment and there are no walk-ins waiting for a haircut. Haircuts cost $30 for customers. Amount Excluded from Employee's Income: Amount Included in Employee's Income: (c) Steve is the Chief Executive Officer at Heinz. Heinz provides Steve a free parking spot in the company's downtown office building. Heinz does not provide this benefit to any other employees. The parking spot would have cost $310 per month for someone from the general public. What are the monthly tax consequences for Steve? Amount Excluded from Employee's Income: Amount Included in Employee's Income:
(a) Nike sells Air Jordans to customers for $180. Each pair of shoes costs Nike $45 to produce. Employees can buy Air Jordans for $30. Amount Excluded from Employee's Income: Amount Included in Employee's Income: (b) Supercuts plans to offer haircuts to employees for free. Employees can get their hair cut whenever a customer fails to show up for an appointment and there are no walk-ins waiting for a haircut. Haircuts cost $30 for customers. Amount Excluded from Employee's Income: Amount Included in Employee's Income: (c) Steve is the Chief Executive Officer at Heinz. Heinz provides Steve a free parking spot in the company's downtown office building. Heinz does not provide this benefit to any other employees. The parking spot would have cost $310 per month for someone from the general public. What are the monthly tax consequences for Steve? Amount Excluded from Employee's Income: Amount Included in Employee's Income:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Please determine the tax consequences to the employee of the following, independent fringe
benefits.
(a) Nike sells Air Jordans to customers for $180. Each pair of shoes costs Nike $45 to
produce. Employees can buy Air Jordans for $30.
Amount Excluded from Employee's Income:
Amount Included in Employee's Income:
(b) Supercuts plans to offer haircuts to employees for free. Employees can get their hair cut
whenever a customer fails to show up for an appointment and there are no walk-ins
waiting for a haircut. Haircuts cost $30 for customers.
Amount Excluded from Employee's Income:
Amount Included in Employee's Income:
(c) Steve is the Chief Executive Officer at Heinz. Heinz provides Steve a free parking spot in
the company's downtown office building. Heinz does not provide this benefit to any
other employees. The parking spot would have cost $310 per month for someone from
the general public. What are the monthly tax consequences for Steve?
Amount Excluded from Employee's Income:
Amount Included in Employee's Income:
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