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Ethics and professional conduct in business Jas Carillo was discussing summer employment with Maria Perez, president of Valparaiso Construction Service: Maria: I'm glad that you're thinking about joining us fur the summer. We could certainly use the help. Jas: Sounds good. I enjoy outdoor work, and I could use the money to help with next year's school expenses. Maria: I've got a plan that can help you out on that. As you know, I'll pay you $8 per hour; but in addition, I'd like to pay you with cash. Since you're only working for the summer, it really doesn't make sense for me to go to the trouble of formally putting you on our pay ml) system. In fact, I do some jobs for my clients on a strictly cash basis, so it would be easy to just pay you that way, Jas: Well, dial's a bit unusual, but I guess money is money. Maria: Yeah, not only that, it's tax-free! Jas: What do you mean? Maria: Didn't you know? Any money that you receive in cash is not reported to the IRS on a W-2 form; therefore, the IRS doesn't know about the income—hence, it's the same as tax-free earnings. Wliy does Maria Perez warn to conduct business transactions using cash (not check or credil card)?

BuyFind

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
Publisher: Cengage Learning
ISBN: 9781305961883
BuyFind

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
Publisher: Cengage Learning
ISBN: 9781305961883

Solutions

Chapter
Section
Chapter 8, Problem 8.1.1C
Textbook Problem

Ethics and professional conduct in business

Jas Carillo was discussing summer employment with Maria Perez, president of Valparaiso Construction Service:
Maria: I'm glad that you're thinking about joining us fur the summer. We could certainly use the help. Jas: Sounds good. I enjoy outdoor work, and I could use the money to help with next year's
school expenses.
Maria: I've got a plan that can help you out on that. As you know, I'll pay you $8 per hour; but
in addition, I'd like to pay you with cash. Since you're only working for the summer, it really
doesn't make sense for me to go to the trouble of formally putting you on our pay ml) system.
In fact, I do some jobs for my clients on a strictly cash basis, so it would be easy to just pay you
that way,
Jas: Well, dial's a bit unusual, but I guess money is money.
Maria: Yeah, not only that, it's tax-free!
Jas: What do you mean?
Maria: Didn't you know? Any money that you receive in cash is not reported to the IRS on a
W-2 form; therefore, the IRS doesn't know about the income—hence, it's the same as tax-free
earnings.

Wliy does Maria Perez warn to conduct business transactions using cash (not check or credil card)?

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Chapter 8 Solutions

Survey of Accounting (Accounting I)
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