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Problem 1: Bart is a participant in his employer's health insurance plan. The plan pays all costs of medical care of employees, less a $20 co-payment that must be paid by the employee at the time of service. Bart also subscribes to a voluntary health insurance plan sponsored by his employer that pays him a lump sum of $50,000 in the event he contracts cancer. The employee and the employer share the premium costs, and employee premium contributions are treated as pre-tax contributions to the insurance policy (plan). Earlier this year, Bart was diagnosed with cancer, and he received benefits under both policies (plans). His total out-of-pocket medical and prescription drug expenses for the cancer treatments was $800 (the rest was covered by his regular medical insurance policy). If Bart had no other medical costs this year, which of the following statements concerning the taxation of Bart's insurance benefits is correct?
Group of answer choices
a. There is no tax on the insurance benefits received.
b. Bart must pay tax on the imputed value of the benefits received because he paid premiums with pre-tax dollars.
c. Bart will have to pay income tax on $50,000.
d. Bart will have to pay income tax on $49,200.
Compute the fair market value of Biomet's available-for-sale equity portfolio for both 2012 and 2011. What was the effect on the company's comprehensive income amount associated with its available-for-sale securities?
And will then cease paying the dividends forever. If the required rate of return on this stock is 9.5 percent, what is current stock price?
Tyler Hawes and Piper Albright formed a partnership, Determine the participation in the year's net income of $104,000 under each of the independent assumption
Cascade & Chinook Company produces and sells a single product. The company's income statement for the most recent month is given below: Sales (15,000 units at $29 per unit) $325,000 Less variable costs: The company has decided to automate a portion o..
You are asked to evaluate a five-year, convertible debt offering being considered by management. This offering, effective January 1, 2013, is for $40 million. It would be issued at 2% below prevailing interest rates at the time of issuance and is due..
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Warner Corporation sold $80,000 of merchandise on credit. The merchandise originally cost $55,000. Warner uses the perpetual method of inventory and records the cost of all sales at the time of the sale. Select ALL debits and credits that would be ma..
What is the rate of return on assets? Wilma and Fred Farmer have the following information about their farm Assets $1,600,000
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Determine the Most probable value of the measured quantity. - determine the Probable error of a single measurement.
As of December 31, 2014, Post Company had total cash of $153,000, notes payable of $85,300, and common stock of $52,100. During 2015, Post earned $33,000 of cash revenue, paid $18,500 for cash expenses, and paid a $2,700 cash dividend to the stockhol..
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