FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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.)
ANSWER IS NOT 5,250 or 5,000, or 0 for Fresh may deduct
b. Matt selects the single health insurance benefit, is reimbursed $5,000 for dependent care, and takes the remainder in cash.
Matt must recognize: $5,000
Fresh must deduct: ???
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