Problem 4: 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 P8,750,000. The income tax rate is 30% of income after bonus. Requirements: Determine the BONUS under each of the following independent assumptions: Bonus is based on income before bonus and before tax. 9. А. В. Bonus is based on income after bonus and after tax. C. Bonus is based on income after bonus but before tax. D. Bonus is based on income after tax but before bonus

Problem 4: 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 P8,750,000. The income tax rate is 30% of income after bonus. Requirements: Determine the BONUS under each of the following independent assumptions: Bonus is based on income before bonus and before tax. 9. А. В. Bonus is based on income after bonus and after tax. C. Bonus is based on income after bonus but before tax. D. Bonus is based on 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

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Question

Problem 4:
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 P8,750,000. The income tax rate is 30% of income after bonus.
Requirements:
Determine the BONUS under each of the following independent assumptions:
А.
9.
Bonus is based on income before bonus and before tax.
В.
Bonus is based on income after bonus and after tax.
С.
Bonus is based on income after bonus but before tax.
D. Bonus is based on income after tax but before bonus

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