3.6 The partnership of Mac and Donald, being a commercial partnership, is subject to income tax of 37.5%. Their profit and loss sharing agreement provides that Mac, the managing partner, is entitled to a bonus of 40% of the net profit. During the year, the partnership earned net profit before bonus and tax of P 140,000. REQUIRED: Compute the bonus of Mac assuming that: a. The bonus is based on the net profit before bonus but after tax. b. The bonus is based on the net profit after bonus and tax.
3.6 The partnership of Mac and Donald, being a commercial partnership, is subject to income tax of 37.5%. Their profit and loss sharing agreement provides that Mac, the managing partner, is entitled to a bonus of 40% of the net profit. During the year, the partnership earned net profit before bonus and tax of P 140,000. REQUIRED: Compute the bonus of Mac assuming that: a. The bonus is based on the net profit before bonus but after tax. b. The bonus is based on the net profit after bonus and tax.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:3.6 The partnership of Mac and Donald, being a commercial partnership,
is subject to income tax of 37.5%. Their profit and loss sharing
agreement provides that Mac, the managing partner, is entitled to a
bonus of 40% of the net profit. During the year, the partnership
earned net profit before bonus and tax of P 140,000.
REQUIRED: Compute the bonus of Mac assuming that:
a. The bonus is based on the net profit before bonus but after tax.
b. The bonus is based on the net profit after bonus and tax.
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