Employers of the Family Bowling Alley Allow Their Employees to Bowl

Employers of the Family Bowling Alley allow their employees to bowl without charge after the employee's working hours and when there are adequate idle bowling lanes.Tom bowled 12 games during the month at no charge when the non-employee charge was $3.00 per game.

A) Tom must include $36 in gross income.
B) Tom must include in gross income the employer's marginal cost of providing the bowling lanes and equipment.
C) Tom is not required to include anything in gross income because this is a "no-additional-cost service" fringe benefit.
D) Tom is not required to include the $36 in gross income if the arrangement is for the convenience of the employer.
E) None of the above.