Answered: Ascertain the value of the taxable…

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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Question

Kelvin was provided with a partially furnished company-owned accommodation with effect from 16 August 2021. He paid a nominal rent of $2,400 for the period of stay in 2021. The annual value of the property is $96,000. Ascertain the value of the taxable benefit. There are 365 days in the year 2021.

Question 6 options:

$50,814

$134,400

$48,414

$132,000

Expert Solution

Step 1

Taxable value of the benefit which the employee has received from the employer during the year is computed as per the tax rules and values prescribed by the government.

Given in the question:

Question belongs to the US country.

Rent paid by employee during the period = $2,400

Employee got the partially furnished accommodation with effect from 16 August 2021

Annual value of the property = $96,000

There are 365 days in the year 2021

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