Question 2 Leslie, age 27, is an employee of Naples Corp. which provides the following nondiscriminatory fringe benefits received in 2021: • insurance premiums of $1,050 for salary continuation payments. Under the plan, Leslie will receive her regular salary in the event she is unable to work due to illness. Leslie collected $7,100 on the policy to replace lost wages while she was ill during the year. • $5,500 tuition under a plan available to all full-time employees. Leslie is a part-time student working on her bachelor's degree in accounting. • hospitalization insurance premiums for Leslie and family. The cost of the coverage for Leslie is $3,000 per year, and the additional cost for dependents is $3,775 per year. The plan has a $2,000 deductible, but Naples contributed $1,500 to the Health Savings Account (HSA). Leslie withdrew only $1,000 from the HSA, and the account earned $6.92 interest during the year. For each of the following, what is the amount to be included in Leslie's gross income? Explain your answer. Where calculations are required, show your work. You may use Word or Excel. 1. Insurance premiums for salary continuation payments 2. The salary continuation payments collected on the salary continuation policy to replace lost wages while she was ill during the year. 3. Tuition reimbursement under a plan available to all full-time employees 4. Hospitalization insurance premiums for Leslie and the family.

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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Leslie, a 27-year-old employee at Naples Corp., received the following nondiscriminatory fringe benefits in 2021: $1,050 in insurance premiums for salary continuation payments Leslie will be paid her regular wage if she is unable to work due to illness under the plan. Leslie received $7,100 from the policy to make up for missing pay during the year.

All full-time employees are eligible for a $5,500 tuition plan. Leslie is a part-time student pursuing a bachelor's degree in accounting and is responsible for her family's hospitalization insurance premiums. Leslie's coverage costs $3,000 per year, with an additional cost of $3,775 per year for dependents. Naples paid $1,500 to the Health Savings Account, which has a $2,000 deductible (HSA). Leslie only took $1,000 out of her HSA over the year, and the account earned $6.92 in interest.