Question

Susan is an auditor at a small public practice accounting firm, Smith & Warren LLP, and receives the following during the year: Salary: $80,000 Holiday gift basket: $350 value Annual membership at local gym: $1,750 value (Susan uses this membership for personal use only) Life insurance premiums paid by employer: $1,100 Private health care insurance premiums paid by employer: $975 In addition, Susan incurred the following expenses during the year, for which she was not reimbursed: CPA Professional Dues (professional status is required by statute for auditors): $1,500 Travel expenses incurred to perform audits of out-of-town clients of the firm): $950 Which of the following is the correct amount of net employment income for Susan? O A. $82,850 OB. $79,650 O C. $80,750 OD. $80,400

Answer 1

solutions 80 000 gym 1750 Salary Annual membership at local Add Life Insurance premium piad by employer Lesst CPA professional dues 11oo 1500 Lessis Travel expenses Net employment Income for Susan 950 80 400 Note: Holiday gift basket & parirate health care Insurance paid by employer is not taxable. Hence option S04OD is correct