An international company appoints a 30-year Harvard MBA as its new president on a 5-year contract at a salary of Php 4,500,000. The salary is to increase each year by 9%. On the first day of the job, a serious past misconduct is discovered about the incumbent. The board of directors therefore decides to fire him the same day. However, as stipulated in the employment contract, he must be paid the present value of the salaries along with a golden handshake in the sum of Php 5,000,000. If ? = 10%, how much is he paid?

An international company appoints a 30-year Harvard MBA as its new president on a 5-year contract at a salary of Php 4,500,000. The salary is to increase each year by 9%. On the first day of the job, a serious past misconduct is discovered about the incumbent. The board of directors therefore decides to fire him the same day. However, as stipulated in the employment contract, he must be paid the present value of the salaries along with a golden handshake in the sum of Php 5,000,000. If ? = 10%, how much is he paid?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter2: Income Tax Concepts

Section: Chapter Questions

Problem 69IIP

See similar textbooks

An international company appoints a 30-year Harvard MBA as its new president on a 5-year contract at a salary of Php 4,500,000. The salary is to increase each year by 9%. On the first day of the job, a serious past misconduct is discovered about the incumbent. The board of directors therefore decides to fire him the same day. However, as stipulated in the employment contract, he must be paid the present value of the salaries along with a golden handshake in the sum of Php 5,000,000. If ? = 10%, how much is he paid?

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Entity A has 20 employees who are each entitled to one day paid vacation leave for each month of service rendered. Unused vacation leaves cannot be carried forward and are forfeited when employees leave the entity. All the employees have rendered service throughout the current year and have taken a total of 150 days of vacation leaves. The average daily rate of the employees in the current period is ₱1,000. However, a 5% increase in the rate is expected to take into effect in the following year. Based on Entity A’s past experience, the average annual employee turnover rate is 20%. How much will Entity A accrue at the end of the current year for unused entitlements? * A. 150,000 B. 90,000 C. 0 D. 94,500
William was the marketing director of a trading company which carries business in Hong Kong. He received an annual salary of HK$700,000 for the year ended 31 March 2022. In December 2021, William took a 10-days trip to Canada to visit his son who is now taking a full-time degree program in the University of Canada. He spent one afternoon to visit one of the major customers. He spent HK40,000 for the entire trip and his employer fully reimbursed him. During the period from 1 April 2021 to 30 September 2021, he and his family lived in a hotel of two rooms which was rented for HK$20,000 per month by his employer. Starting from 1 October 2021 he and his family lived in a flat which was rented by him for HK$25,000 per month and his employer only reimbursed him HK$24,000 per month. Documentary evidence had to be submitted for the reimbursement. During the year ended 31 Mach 2022, William made the following payment:- 1) Paid annual membership fee of HK$4,000 to Chartered Institute of…
Norma Smith is the controller of Baylor Corporation and is responsible for the preparation of the year-end financial statements. The following transactions occurred during the year. a. On December 20, 2020, a former employee filed a legal action against Baylor for $100,000 for wrongful dismissal. Management believes the action to be frivolous and without merit. The likelihood of payment to the employee is remote. b. Bonuses to key employees based on net income for 2020 are estimated to be $150,000. c. On December 1, 2020, the company borrowed $600,000 at 8% per year. Interest is paid quarterly. d. Accounts receivable at December 31, 2020, is $10,000,000. An aging analysis indicates that Baylor’s expense provision for doubtful accounts is estimated to be 3% of the receivables balance. e. On December 15, 2020, the company declared a $2.00 per share dividend on the 40,000 shares of common stock outstanding, to be paid on January 5, 2021. f. During the year, customer…
The WGN Company has a bonus arrangement, which grants the financial vice president and other executives a $15,000 bonus if the net income exceeds the previous year's by $1,000,000. Noting that the current financial statements report an increase of $950,000 in the net income, Vice President Jack Brickhouse asks Louise Boudreau, the controller, to reduce the estimate of warranty expense to $60,000. The present estimate of warranty expense is $500,000 and is known by both Brickhouse and Boudreau to be a fairly "soft" amount. Answer the following questions: 1. Should Boudreau lower her estimate? 2. What ethical issue is at stake? Would anyone be harmed by the change in estimate? 3. Is Brickhouse acting ethically?
The football coach at a midwestern university was given a 5-year employment contract that paid $800,000 the first year, and increased at an 8% uniform rate in each subsequent year. At the end of the first year’s football season, the alumni demanded that the coach be fired. The alumni agreed to buy his remaining years on the contract by paying him the equivalent present sum, computed using a 6% interest rate. How much will the coach receive?
On January 1, 2020, Beyonce Inc. announced the decision to close its branch located in North Luzon and terminate all 200 employees in that branch. Beyonce will pay P20,000 per employee as a result of the termination.Nevertheless, the company needs to retain at least 20% of the branch’s employees until its closure in eight months. This is to ensure that the closing will wind-up as planned. Retained employees for the next eight months shall receive a P60,000 payment at the end of the eight months instead of the P20,000. Beyonce finally decided to retain 50 employees until the branch is closed in eight months.How much should be recognized as termination benefit? a. 3,000,000 b. 4,000,000 c. 2,000,000 d. 6,000,000
A company recently appointed a senior manager from a main competitor. As part of the benefits discussion between the new manager and the company, it was agreed that a defined benefit scheme would be for a single member, the new manager, and consist of the following benefits: members will receive 4% of their final salary for each year of service. The manager earned a salary of £700,000 for the year 2020 and will increase at a rate of 2% per year beginning in 2021. The new manager has signed a 10 year contract and, subsequently, there is considered to be no possibility of the manager resigning or retiring before the end of the 10 year period. The discount rate applicable to the pension scheme is 10%. Kindly do the table, journal entries and slight expalnations and how does it affect Statement of profit or loss and Statement of financial position.
The entity shall pay P20,000 per employee upon termination. payment at the end of eight months in addition to receiving terminate all 200 employees as a result of economic downturn. the entity needs to retain at least 20% of employees until to stay until the closing of the factory shall receive P60,000 smoothly and all remaining customer orders are completed, However, to ensure that the windup of the factory occurs As a result, the entity announced that employees who agree 3. What is the short-term employee benefit? Problem 19-16 (IFRS) and closure of the factory in eight months. As a result, the entity announced that employees who o to stay until the closing of the factory shall receive P6000 payment at the end of eight months in addition to receiri their current wage throughout the period of closure insteai of the P20,000. Based on this offer, the entity expected to retain 50 employees until the factory is closed. 1. What is the total benefit under the termination plan? a. 6,000,000…
At the beginning of current year, Zamba Company announced the decision to close the factory located inZamboanga and terminate all 150 employees as a result of economic downturn.The entity shall pay P30,000 per employee upon termination.However, to ensure that the windup of the factory occurs smoothly and all remaining customer orders arecompleted, the entity needs to retain some employees until closure of the factory in nine months.As a result, the entity announced that employees who agree to stay until the closing of the factory shallreceive P80,000 payment at the end of nine months in addition to receiving their current wage throughoutthe period of closure instead of the P30,000.Based on this offer, the entity expected to retain 20 employees until the factory is closed.REQUIRED:12. Compute the total benefit under the termination plan.13. Compute the amount of termination benefit.14. Compute the amount of short-term benefit.
During a job interview, Pam Thompson is offered a salary of $41,000. The company gives annual raises of 5 percent. What would be Pam's salary during her fifth year on the job?
Due to recent acquisition, Adaro Co Ltd plans to close a factory in 10 months and, at that time, terminate employment of all of the remaining employees at the factory. Because Adaro Co Ltd needs the expertise of the employees at the factory to complete some contracts, it announce a plan of termination as follows. Each employee who stand and renders service until the closure of the factory will receive on the termination date a cash payment of CU 50,000, employees leaving before the closure of the factory will receive CU 20,000.There are 1,200 employees at the factory . At the time of the announcing the plan, Adaro Co Ltd expects 200 of them to leave before the closureRequired :Determine the amount of termination benefits and short term employee benefit in accordance with IAS 19 ?
Brooke Remming is the Chief Executive Officer of Dundem Corp. The board of directors has agreed to pay Brooke a salary of $400,000 plus a 15% bonus if the company’s pretax income increases by at least 10% from the prior year. In the prior year, Dundem reported pretax income of $3,000,000.In the final week of the current year, Brooke projects that pretax income will be $3,250,000. While this is a nice increase over the prior year, she realizes that the increase is below the 10% required for her bonus. Brooke has devoted many years to the company and feels that the company has had another successful year thanks to her efforts and good decisions.As one example of a good decision, Brooke noticed earlier in the year that the company’s stock price had fallen to $42 per share. She felt that price was too low, so she used some of the company’s available cash to purchase 10,000 shares. The current price has risen to $50 per share, and she is considering whether to sell the stock. She calculates…