Matt works for Fresh Corporation. Fresh offers a cafeteria plan that allows each employee to receive $15,000 worth of benefits each year. The menu of benefits is as follows: Benefit Cost Health insurance—single $ 5,000
Matt works for Fresh Corporation. Fresh offers a cafeteria plan that allows each employee to receive $15,000 worth of benefits each year. The menu of benefits is as follows:
Benefit Cost
Health insurance—single $ 5,000
Health insurance—with spouse $ 8,000
Health insurance—with spouse and dependents $ 11,000
Dental and vision $ 1,500
Dependent care—any specified amount up to $5,000 Variable
Adoption benefits—any specified amount up to $5,000 Variable
Cash—any specified amount up to $15,000 plan benefit Variable
401(k)—any specified amount up to $10,000 Variable
For each of the following independent circumstances, determine the amount of income Matt must recognize and the amount of deduction Fresh may claim: (Leave no answer blank. Enter zero if applicable.)
Problem 12-49 Part b (Static)
a) Matt elects the single health insurance benefit and places 10,000 dollars in his 401K
b) Matt selects the single health insurance benefit, is reimbursed $5,000 for dependent care, and takes the remainder in cash.
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