Rajan’s employer, a shoemaker, takes all of its employees out to dinner whenever it is an employee’s birthday. The employer spent $3,000 on “birthday dinners” last year. What is the taxable value (if any) of the fringe benefit provided? (Assume that Rajan’s employer does not use the 12-week register method for meal entertainment fringe benefits.) a.Nil b.$1,500 c.$1,000 d.$3,000

Tax is a part of earning a person or business is liable to pay the government to work within the…

Answered: Rajan’s employer, a shoemaker, takes…

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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Rajan’s employer, a shoemaker, takes all of its employees out to dinner whenever it is an employee’s birthday. The employer spent $3,000 on “birthday dinners” last year. What is the taxable value (if any) of the fringe benefit provided? (Assume that Rajan’s employer does not use the 12-week register method for meal entertainment fringe benefits.)

	a.	Nil
	b.	$1,500
	c.	$1,000
	d.	$3,000

Definition Definition Benefits in addition to compensation that companies give to their employees. Fringe benefits can boost morale and productivity and keep employees motivated. Companies often use fringe benefits as a competitive advantage to recruit and retain employees. Examples of fringe benefits include pensions, vacation time, tuition reimbursement, free or subsidized meals, and gym memberships.

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