he Generous Corporation’s president has a profit sharing agreement with the company. The agreement states that the president is to receive a bonus consisting of a basic amount and equivalent to 10% of the company’s net income before deduction of bonus but after deduction of income tax. In addition, the basic bonus shall be increased by the company’s tax savings on bonus because the total amount of bonus is deductible in computing the company’s taxable income. The company registered a net income of P5,000,000 before deduction of the president’s bonus and income tax. The company is subject to corporate income tax of 30%. 1. The total bonus due to the president is
he Generous Corporation’s president has a profit sharing agreement with the company. The agreement states that the president is to receive a bonus consisting of a basic amount and equivalent to 10% of the company’s net income before deduction of bonus but after deduction of income tax. In addition, the basic bonus shall be increased by the company’s tax savings on bonus because the total amount of bonus is deductible in computing the company’s taxable income. The company registered a net income of P5,000,000 before deduction of the president’s bonus and income tax. The company is subject to corporate income tax of 30%. 1. The total bonus due to the president is
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 10PA: Lemur Corp. is going to pay three employees a year-end bonus. The amount of the year-end bonus and...
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The Generous Corporation’s president has a profit sharing agreement with the company. The agreement states that the president is to receive a bonus consisting of a basic amount and equivalent to 10% of the company’s net income before deduction of bonus but after deduction of income tax. In addition, the basic bonus shall be increased by the company’s tax savings on bonus because the total amount of bonus is deductible in computing the company’s taxable income. The company registered a net income of P5,000,000 before deduction of the president’s bonus and income tax. The company is subject to corporate income tax of 30%.
1. The total bonus due to the president is
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