EF Enterprises realized a profit of 240,000 for the year. Fajardo, the managing partner, is allowed a bonus of 20% with an income tax rate of 35%. What is the bonus on profit after deduction of bonus but before deduction for income tax?

EF Enterprises realized a profit of 240,000 for the year. Fajardo, the managing partner, is allowed a bonus of 20% with an income tax rate of 35%. What is the bonus on profit after deduction of bonus but before deduction for income tax?

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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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

EF Enterprises realized a profit of 240,000
for the year. Fajardo, the managing partner, is
allowed a bonus of 20% with an income tax
rate of 35%.
What is the bonus on profit after deduction of
bonus but before deduction for income tax?
O P61,538
P48,000
O P40,000
O P129,230
O The answer is not provided.

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