4. Meals and Entertainment, Business Gifts (LO. 1, 4)

Jan owns the Mews Bar and Grill. Every year at Christmas, he has a party for his 20 employees and their families. This year's party cost $1,600. At the party, Jan presented each employee with a $50 gift certificate redeemable for merchandise at a local department store.

a. If the gift certificates are deemed de minimis fringe, how much can Jan deduct for business and gift expenses? $____________.

b. Assume that the party is attended by 10 employees and 10 of the Mews's major suppliers. At the party each receives a holiday cheese basket that cost $30.

How much can Jan deduct? $____________.