JIMIN Company has an agreement to pay the executive officers a bonus of 5% of the entity’s earnings. The income for the year before bonus and tax is ₱8,750,000. The income tax rate is 30% of income after bonus. 1. Bonus is based on income before bonus and before tax. 2. Bonus is based on income after bonus and after tax.
JIMIN Company has an agreement to pay the executive officers a bonus of 5% of the entity’s earnings. The income for the year before bonus and tax is ₱8,750,000. The income tax rate is 30% of income after bonus. 1. Bonus is based on income before bonus and before tax. 2. Bonus is based on income after bonus and after tax.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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JIMIN Company has an agreement to pay the executive officers a bonus of 5% of the entity’s earnings. The
income for the year before bonus and tax is ₱8,750,000. The income tax rate is 30% of income after bonus.
1. Bonus is based on income before bonus and before tax.
2. Bonus is based on income after bonus and after tax.
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