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7. Washington Corporation provides an incentive compensation plan under which its president is to receive a bonus equal to 10 percent of Washington's income in excess of P100,000 before deducting income tax and bonus is P320,000 and the effective tax rate is 40 percent, the amount of the bonus should be a. 20,000 b. 22,000 c. 32,000 d. 44,000

7. Washington Corporation provides an incentive compensation plan under which its president is to receive a bonus equal to 10 percent of Washington's income in excess of P100,000 before deducting income tax and bonus is P320,000 and the effective tax rate is 40 percent, the amount of the bonus should be a. 20,000 b. 22,000 c. 32,000 d. 44,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please put all of the necessary information and computations for better understanding. Thank you.

7. Washington Corporation provides an incentive compensation plan under which its president is to receive a bonus equal to 10 percent of Washington's income in excess of P100,000 before deducting income tax and bonus is P320,000 and the effective tax rate is 40 percent, the amount of the bonus should be а. 20,000 b. 22,000 c. 32,000 d. 44,000 8. Wright, Inc. has an incentive compensation plan under which the sales manager receives a bonus equal to 10 percent of the company's income after deductions for bonus and income taxes. Income before bonus and income taxes is P400,000. The effective income tax rate is 30 percent. How much is the bonus (rounded to the nearest peso)? а. 40,000 b. 30,108 с. 28,866 d. 26,168 9. Georgy, Inc. has an incentive compensation plan under which the sales manager receives a bonus equal to 10 percent of the company's income before deductions for bonus but after deduction for income taxes. Income before bonus and income taxes is P400,000. The effective income tax rate is 30 percent. How much is the bonus (rounded to the nearest peso)? a. 40,000 b. 30,108 c. 28,866 d. 26,168
Transcribed Image Text:7. Washington Corporation provides an incentive compensation plan under which its president is to receive a bonus equal to 10 percent of Washington's income in excess of P100,000 before deducting income tax and bonus is P320,000 and the effective tax rate is 40 percent, the amount of the bonus should be а. 20,000 b. 22,000 c. 32,000 d. 44,000 8. Wright, Inc. has an incentive compensation plan under which the sales manager receives a bonus equal to 10 percent of the company's income after deductions for bonus and income taxes. Income before bonus and income taxes is P400,000. The effective income tax rate is 30 percent. How much is the bonus (rounded to the nearest peso)? а. 40,000 b. 30,108 с. 28,866 d. 26,168 9. Georgy, Inc. has an incentive compensation plan under which the sales manager receives a bonus equal to 10 percent of the company's income before deductions for bonus but after deduction for income taxes. Income before bonus and income taxes is P400,000. The effective income tax rate is 30 percent. How much is the bonus (rounded to the nearest peso)? a. 40,000 b. 30,108 c. 28,866 d. 26,168
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