CH 13 MASTERY

Problem 13-38 (b) (LO. 4)

A business entity's taxable income before the cost of certain fringe benefits paid to owners and other employees is $1,690,000. The amounts paid for these fringe benefits are reported as follows.

Note the following: (1) Assume the fringe benefit plans are not discriminatory and (2) The business entity is equally owned by seven owners.

	Owners		Other Employees
Group term life insurance	$42,000		$89,000
Lodging incurred for the
convenience of the employer	86,000		107,000
Qualified retirement plan	62,000		122,000

a. Calculate the taxable income of the business entity if the entity is a partnership, a C corporation, and an S corporation.

The taxable income of the business entity, if it is a partnership, is $ . If the entity is a C corporation, it is $ , and if the entity is an S corporation, it is $ .