Problem 1 During 2021, Red Horse Company provided cash fringe benefits to its employees in...
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Problem 1 During 2021, Red Horse Company provided cash fringe benefits to its employees in the total amount of P3,200,000. The following additional data are provided: 1.80% of the total amount given was provided to managers and supervisors as follows: a. 50% classified as resident citizen b. 30% classified as special alien c. 20% classified as non-resident alien not engaged in business in the Philippines 2 20% of the total amount was given to rank-and-file employees Required: Compute the following: 1. The grossed-up monetary value of the fringe benefit 2. The total fringe benefits tax Problem II Peter Pan, a self-employed individual, had provided the following fringe benefits during the 2020 taxable year: a. Housing units provided to the Plant Supervisor necessary to the business operation of the employer: Fair market value 900,000 Zonal value 1,000,000 b. Cash payment for the purchase of grocery items 382,500 c. Car benefits in the name of the finance officer acquired on installment basis: Cash price 750,000 Installment price Down payment 400,000 Annual installment for four years at the amount of 400,000 Required: Compute the following 1. the total fringe benefits expense 2. the fringe benefit tax
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