Problem 1-28 (ACP) Nature Company had an agreement to pay the sales manager a bonus of 5% of the entity's earnings. The income for the year before bonus and tax was P5,250,000. The income tax rate is 25%. Required: Determine the bonus under each of the following independent assumptions: 1. Bonus is a certain percent of the income before bonus and before tax. 2. Bonus is a certain percent of income after bonus but before tax. 3. Bonus is a certain percent of income after bonus and after tax. 4. Bonus is certain percent of income after tax but before bonus.

Problem 1-28 (ACP) Nature Company had an agreement to pay the sales manager a bonus of 5% of the entity's earnings. The income for the year before bonus and tax was P5,250,000. The income tax rate is 25%. Required: Determine the bonus under each of the following independent assumptions: 1. Bonus is a certain percent of the income before bonus and before tax. 2. Bonus is a certain percent of income after bonus but before tax. 3. Bonus is a certain percent of income after bonus and after tax. 4. Bonus is certain percent of income after tax but before bonus.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Flint, an S corporation with substantial AEP, reports operating gross receipts of $410,000, taxable…

A: Calculate the Net Passive IncomeNet Passive income = Taxable Interest Income-Deductions Attributable…

Q: Company C had the following investment. Help them determine the financial statement implications of…

Q: Tax Drill - Revenue Procedure 2004-34 Bigham Corporation, an accrual basis calendar year taxpayer,…

A: The accrual concept states that the revenues are recognized when earned and the expense is…

Q: As of December 31 (the end of the accounting period), ABC Company has a profit before tax of…

A: Income tax is a tax imposed by the government on the income earned by individuals and entities…

Q: If the current year tax rate is 20% and a company estimates next year's tax rate will be 25%, income…

A: For each financial year, the businesses need to pay income taxes, for which they need to make…

Q: A company made an additional (incremental) income of $10.000 during the last week of the year. This…

A: Answer:- Effective tax rate:- The effective tax rate can be defined as the percentage of an…

Q: Saginaw Incorporated completed its first year of operations with a pretax loss of $627,500. The tax…

A: The journal entry to record the deferred tax consequences of the current year NOL before considering…

Q: Instruction 5-1 Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. Refer…

A: The financial position of the company can be arrived from the income statement prepared by the…

Q: For the current year ($ in millions), Centipede Corp. had $152 in pretax accounting income. This…

A: In order to derive at the taxable income, temporary difference of warranty differences should be…

Q: Knowledge Check 01 Sicora Incorporated reported installment sales totaling $670,000 in its income…

Q: Effect of Interest Deduction Limitations: Using the information in the following schedule, calculate…

A: Step 1:Calculate permissible Interest Deduction The permissible interest deduction is 30% of the…

Q: 8 Cribbage Company had income before income tax of $164,000 last quarter and a 34% tax rate. Its net…

A: Net income after tax is that amount which is earned by the investor on his investment. It is the…

Q: Problem 17-6AA Income statement computations and format LO A2 (The following information applies to…

A: SOLUTION- NET INCOME IS THE TOTAL AMOUNT OF MONEY YOUR BUSINESS EARNED IN A PERIOD OF TIME , MINUS…

Q: Consolidated income Štatement 12 Months Ended in USD millions, except per share data Dec. 31, 2020…

A: Generally accepted accounting principles excludes dirty surplus in reformulated income statement.…

Q: $15,612.80 Kresloff Company has only two employees and is located in a state that has set an…

A: FICA taxes are levied on employees and are withheld by the employers as per the Federal Insurance…

Q: Pillar has an annual payroll of $135,000. In addition, the company incurs payroll tax expense of 8%…

A: Income statement is the financial statement which is prepared to know the profitability of the…

Q: Required Answer each of the following questions by providing supporting computations. 1. Assume that…

A: hey there since you have posted multiple questions, we can answer only first question, please…

Q: Shu Company located in Arkansas had FUTA taxable wages of $130,000 and SUTA taxable wages (on first…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Recording Income Tax Expense Aquafena Inc. recognized taxable income of $100,000 for the year ended…

A: Journal Entry is the first step of Accounting Process. It is the recording of transactions in…

Q: Recording Income Tax with Changing Tax Rates The Jets Company recorded a deferred tax liability of…

A: Deferred Tax -The term "deferred tax" (DT) describes the tax amount that is different between the…

Q: Assuming Sunny-D Cafe has a tax rate of 30 percent, calculate sales for the firm given the following…

A: - Tax rate: 30%- Net income: $37,900- Interest expense: $11,500- Depreciation expense: $14,200-…

Question

Problem 1-28 (ACP)
Nature Company had an agreement to pay the sales manager
a bonus of 5% of the entity's earnings. The income for the
year before bonus and tax was P5,250,000. The income tax
rate is 25%.
Required:
Determine the bonus under each of the following
independent assumptions:
1. Bonus is a certain percent of the income before bonus
and before tax.
2.
Bonus is a certain percent of income after bonus but
before tax.
3.
Bonus is a certain percent of income after bonus and after
tax.
4. Bonus is certain percent of income after tax but before bonus.
Problem 139 (Tar

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Recording Income Tax Expense Rangee Rover Inc. had taxable income of $218,500 for the year. The GAAP basis of accounts receivable (net) is $13,800 less than the tax basis of accounts receivable. Assuming a tax rate of 25%, record the income tax journal entry on December 31. Assume zero beginning balances in deferred tax accounts. • Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Name Cr. Dec. 31 Income Tax Expense Deferred Tax Liability Income Tax Payable N/A To record income tax expense. > > Dr. 54,625 0 0 O 0x 13,800 * 40,825 * 0
14 Victory ML Bus company has the following data for the first quarter of 2021: Gross receipt from passengers P 8,000,000 Gross revenue from cargo operations 5,000,000 Expenses – Passengers operation 4,750,000 Expenses – Cargo operations 2,500,000 Gross receipt from rental of facilities 2,000,000 Additional info: 25% of its gross revenue from cargo operations were still outstanding as of the end of the quarter Required: determine the total business tax due for the first quarter
Km. 205.
vi.8
Years Revenue Cash Expense Book Depreciation Book Income Pre-Tax Book Tax at 32% After Tax Book Income Financial Measures Profit Margin % Net Assets ROA % Cashflow Revenue Cash Expense Tax Depreciation Pretax Income Tax at 32% After Tax Income After Tax Cashflow Cumulative Cashflow Payback Period Present Worth 10 PW12 PW15 IRR PV Index(15) Facility Cost Income Tax Rate 0 C. -9.5 d. -12.4 $ 100,000.00 2.2 Years 91740.92679 0.395702526 1 0.684350818 $ 100,000.00 32% $30,000.00 $100,000.00 $120,000.00 $140,000.00 $150,000.00 $150,000.00 $50,000.00 $60,000.00 $70,000.00 $75,000.00 $75,000.00 2 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $20,000.00 $0.20 $20,400.00 $27,200.00 $0.26 $9,600.00 $12,800.00 $16,000.00 $17,600.00 $17,600.00 $20,400.00 ($100,000.00) $40,400.00 $51,040.00 ($100,000.00) -$59,600.00 -$8,560.00 $40,000.00 $50,000.00 $55,000.00 $55,000.00 $0.23 3 $0.45 $36,727.27 $80,000.00 $60,000.00 $40,000.00 $20,000.00 $0.85 $1.87 4 $19,040.00 5 $34,000.00 $37,400.00 $0.24…
QUESTION 6 A service-based company reports gross revenue of $125,000; sales discounts of $4,500; allowance for doubtful accounts of $6,000; operating expenses of $89,600; and a loss on sale of PP&E of $2,000. What is the company's net income after taxes assuming a tax rate of 20%?
Entity A has an incentive compensation plan under which the sales manager receives a bonus equal to 10percent of the company's income after deductions for bonus and income taxes. Income before bonus and incometaxes is P500,000. The effective income tax rate is 30 percent. How much is the amount of bonus (rounded to the nearest peso)?a. 32,710 b. 60,748 c. 30,974 d. 37,210 How much is the amount of income tax?a. 131,776 b. 140,708 c. 138,837 d. 140,187
11. The Dot Corporation has changed its year-end from a calendar year-end to August 31. The income for its short period from January 1 to August 31 is $54,000. The tax for this short period is: a.$2,040 b.$8,667 c.$11,340 d.$6,250