The employees of Mauve Accounting Services are permitted to use the copy machine for personal purposes, provided the privilege is not abused. Ed is the president of a civic organization and uses the copier to make several copies of the organization's agenda for its meetings. The copies made during the year would have cost $150 at a local office supply
a. Ed must include $150 in his gross income.
b. Ed may exclude the cost of the copies as a no-additional cost fringe benefit.
c. Ed may exclude the cost of the copies only if the organization is a client of Mauve.
d. Ed may exclude the cost of the copies as a de minimis fringe benefit.
e. None of these.
d
RATIONALE: Choice b. is incorrect because the employer does incur additional costs. Choice c. is incorrect because there are other circumstances where the cost of the copies would not result in income to Ed. "Occasional copies" is a frequently permitted de minimis fringe benefit.
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Which of the following is an addition to net income when the indirect method is used?
a. an increase in inventory b. a loss on sale of equipment c. a decrease in accounts payable d. an increase in accounts receivable
A pension plan:
A. Can be a defined benefit plan or an undefined benefit plan. B. Is the same as Other Postretirement Benefits. C. Is a contractual agreement between an employer and its employees in which the employer provides benefits to employees after they retire. D. Can be underfunded if the plan assets are more than the accumulated benefit obligation. E. Is always funded fully by employers.
Patty has $9,000 in monetary assets, annual living expenses of $36,000, a $12,000 car loan balance, and $45,000 in equity in her house. What is her month's living expenses covered ratio?
A) 1.125 times B) 3.75 times C) 3.0 times D) There is not enough information to answer this question.
Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit$92Budgeted unit sales (all on credit): July 9,000August 11,300September 10,400October 10,800? Raw materials requirement per unit of output 4poundsRaw materials cost$1.00per poundDirect labor requirement per unit of output 2.8direct labor-hoursDirect labor wage rate$22.00per direct labor-hourVariable selling and administrative expense$1.50per unit soldFixed selling and administrative expense$70,000per month?Credit sales are collected: 40% in the month of the sale 60% in the following month?Raw materials purchases are paid: 30% in the month of purchase 70% in the
following month?The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs.?The budgeted sales for August is closest to: A. $993,600 B. $1,039,600 C. $828,000 D. $956,800