Ridge Is the Manager of a Motel

Ridge is the manager of a motel.As a condition of his employment,Ridge is required to live in a room on the premises so that he would be there in case of emergencies.Ridge considered this a fringe benefit,since he would otherwise be required to pay $600 per month rent.The room that Ridge occupied normally rented for $60 per night,or $1,500 per month.On the average,90% of the motel rooms were occupied.As a result of this rent-free use of a room,Ridge is required to include in gross income.

A) $0.
B) $600 per month.
C) $1,500 per month.
D) $1,350 ($1,500 * .90 = $1,350) .
E) None of the above.