PAYROLL ACCT.,2019 ED.(LL)-TEXT
PAYROLL ACCT.,2019 ED.(LL)-TEXT
19th Edition
ISBN: 9781337619783
Author: BIEG
Publisher: CENGAGE L
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Chapter 4, Problem 1QD
To determine

State whether the cash should be received from Person AB for the meals included in the taxable wages.

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Alex Oberstar, a cook in the Lagomarsino Company cafeteria, is furnished two meals each day during his eight-hour shift. Oberstar’s duties require him to have his meals on the company’s premises. Should the cash value of Oberstar’s meals be included as part of his taxable wages? Explain.
For each independent situation, determine the amount, if any that is includible in the gross income of the employee. The employee of a motel has the choice of free lodging on the premises (fair market value $400 per week) or extra cash compensation. He is not required to live on premises. He chooses the lodging. An employee arranges to have his annual bonus, $1,000, paid directly to his son. His objective is to make a wedding gift to the son. An employee earns a salary of $500 per week. Pursuant to a court order, $100 of his salary goes to his ex-wife for child support.
Mary Johnson is earning $40,000 per week as her basic salary.Ms. Johnson lives in a house that the company pays the Landlord $5,000 weekly.  She receives a non-taxable uniform allowance of $12,500 per week.  Ms. Johnson has asked the payroll department to deduct from her salary $5,000 to National Housing Trust (NHT). The company has an approved pension scheme for which the employee contributes 5% per week and the employer matches this amount by contributing the same percentage for the employee. Required: a)     Calculate the net pay for Mary Johnson for the week.  b)     Compute the taxes that the company will pay for Ms. Johnson.
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