Matt works for Fresh Corporation. Fresh offers a cafeteria plan that allows each employee to receive $15,000 worth of benefits each year. The menu of benefits is as follows: BenefitCostHealth insurance—single$ 5,000Health insurance—with spouse$ 8,000Health insurance—with spouse and dependents$ 11,000Dental and vision$ 1,500Dependent care—any specified amount up to $5,000VariableAdoption benefits—any specified amount up to $5,000VariableCash—any specified amount up to $15,000 plan benefitVariable401(k)—any specified amount up to $10,000VariableFor 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 deductb. Matt selects the single health insurance benefit, is reimbursed $5,000 for dependent care, and takes the remainder in cash. Matt must recognize: $5,000Fresh must deduct: ???

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Answered: Matt works for Fresh Corporation. Fresh…

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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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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