Charlie was hired by Ajax this year as a corporate executive and
a member of the board of directors. During the current year,
Charlie received the following payments or benefits paid on his
behalf.
Salary payments | $ | 117,500 |
Contributions to qualified pension plan | 18,700 | |
Qualified health insurance premiums | 9,750 | |
Year-end bonus | 15,900 | |
Annual director’s fee | 18,200 | |
Group-term life insurance premiums (face value $40,000) | 855 | |
Whole life insurance premiums (face value $100,000) | 1,640 | |
Disability insurance premiums (no special elections) | 4,840 | |
a. Charlie uses the cash method and calendar year for tax purposes. Calculate Charlie’s gross income for the current year.
b. Suppose that Ajax agrees to pay Charlie an additional $146,000 once Charlie completes five years of employment. Will this agreement alter Charlie’s gross income this year relative to your part (a) answer?
Yes
No
c. Suppose that in exchange for his promise to
remain with the firm for the next four years, Ajax paid Charlie
four years of director’s fees in advance. Will this arrangement
alter Charlie’s gross income this year relative to your part (a)
answer?
Yes
No
d. Assume that in lieu of a year-end bonus Ajax transferred 900 shares of Bell stock to Charlie as compensation. Further assume that the stock was listed at $49 per share and Charlie would sell the shares by year-end, at which time he expected the price to be $53 per share. What would be the value of compensation and gain on sale which would be included in Charlie’s gross income?
Value of Compensaton:
Gain on Sale:
e. Suppose that in lieu of a year-end bonus Ajax made Charlie’s house payments (a total of $24,700). What would be the value of house payments which would be included in Charlie’s gross income?
Income:
Charlie was hired by Ajax this year as a corporate executive and a member of the...
Charlie was hired by Ajax this year as a corporate executive and a member of the board of directors. During the current year, Charlie received the following payments or benefits paid on his behalf. Salary payments $ 140,500 Contributions to qualified pension plan 10,300 Qualified health insurance premiums 12,150 Year-end bonus 13,900 Annual director’s fee 19,100 Group-term life insurance premiums (face = $40,000) 865 Whole life insurance premiums (face = $100,000) 1,810 Disability insurance premiums (no special elections) 5,050 a....
Charlie was hired by Ajax this year as a corporate executive and a member of the board of directors. During the current year, Charlie received the following payments or benefits paid on his behalf. Salary payments $ 109,500 Contributions to qualified pension plan 17,300 Qualified health insurance premiums 9,200 Year-end bonus 21,700 Annual director’s fee 19,400 Group-term life insurance premiums (face value $40,000) 1,110 Whole life insurance premiums (face value $100,000) 1,910 Disability insurance premiums (no special elections) 4,570 a....
Charlie was hired by Ajax this year as a corporate executive and a member of the board of directors. During the current year, Charlie received the following payments or benefits paid on his behalf Salary payments Contributions to qualified pension plan Qualified health insurance premiums Year-end bonus Annual director's fee Group-term life insurance premiums (face value $40,000) Whole life insurance premiums (face value $100,000) Disability Insurance premiums (no special elections) $110,500 20, 100 8,800 16,200 11,200 1,050 1,900 4,520 a....
Comprehensive Problem 5-84 (LO 5-1, LO 5-2, LO 5-3) (Algo) Charlie was hired by Ajax this year as a corporate executive and a member of the board of directors. During the current year, Charlie received the following payments or benefits paid on his behalf. Salary payments $ 104,500 Contributions to qualified pension plan 13,800 Qualified health insurance premiums 9,950 Year-end bonus 19,900 Annual director’s fee 9,000 Group-term life insurance premiums (face value $40,000) 965 Whole life insurance premiums (face value...
Andres has received the following benefits this year: Salary $92000 Contribution to qualified pension plan $10200 Qualified health insurance premiums $8400 Year-end bonus $15000 Group - term life insurance premiums (face=$40000) 1750 whole life insurance premiums (face=$100000) 2420 Disability insurance premiums $ 1800 Besides these benefits, Andres missed work for two months due to an illness. During his illness, Andres received $6500 in sick pay from a disability insurance policy. Assume Andres has disability insurance provided by his employer as...
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