Discussion Question 5-13 (LO. 2, 4)Eagle Life Insurance Company pays its employees $0.30 per mile for driving their personal automobiles to and from work. The companyreimburses each employee who rides the bus $100 a month for the cost of a pass. Tom, in his Mazda 2-seat Roadster, collected $100 for hisautomobile mileage, and Mason received $100 as reimbursement for the cost of a bus pass.If an amount is zero, enter "0".a. What are the effects of the $100 reimbursement on Tom's and Mason's gross income?Tom includes✔and Mason excludes✔the $100 in gross income.Feedback✓ Check My WorkThe intent of the exclusion for qualified transportation fringe is to encourage the use of mass transit for commuting to and from work.b. Assume that Tom and Mason are in the 24% marginal tax bracket and the actual before-tax cost for Tom to drive to and from work is$0.30 per mile. What are Tom's and Mason's after-tax costs of commuting to and from work?Tom's after-tax cost is $0 X and Mason's after-tax cost is $0✔ for commuting to and from work.• +

Commuting expenses include the costs of driving a car or paying fees to commute by bus, trolley,…

b. Assume that Tom and Mason are in the 24% marginal tax bracket and the actual before-tax cost for Tom to drive to and from work is $0.30 per mile. What are Tom's and Mason's after-tax costs of commuting to and from work? Tom's after-tax cost is $ 0x and Mason's after-tax cost is $ O✓ for commuting to and from work.

b. Assume that Tom and Mason are in the 24% marginal tax bracket and the actual before-tax cost for Tom to drive to and from work is $0.30 per mile. What are Tom's and Mason's after-tax costs of commuting to and from work? Tom's after-tax cost is $ 0x and Mason's after-tax cost is $ O✓ for commuting to and from work.

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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