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The 2022 bonus is based on profit after bonus but before taxes. Compute the amount of the bonus for 2022.

The 2022 bonus is based on profit after bonus but before taxes. Compute the amount of the bonus for 2022.

FINANCIAL ACCOUNTING
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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3. Wizards Company sold 4,100,000 boxes of apple pie mix. Each box contains one coupon, in which 10 coupons, with P5 entitles the customer to a baking pan. Wizards company pays P18 per pan and P2 for handling and shipping. Wizards company estimates that 70% of the coupons will be redeemed, even though only 2,150,000 coupons had proceeded during 2023. The liability for unredeemed coupons on its December 31, 2023 is
Transcribed Image Text:3. Wizards Company sold 4,100,000 boxes of apple pie mix. Each box contains one coupon, in which 10 coupons, with P5 entitles the customer to a baking pan. Wizards company pays P18 per pan and P2 for handling and shipping. Wizards company estimates that 70% of the coupons will be redeemed, even though only 2,150,000 coupons had proceeded during 2023. The liability for unredeemed coupons on its December 31, 2023 is
Orlando Company has a contract with its CEO to pay him a bonus during each of the years 2021 – 2024. The profit before deductions for bonus and income taxes were P14,500,000 in 2021; P18,000,000 in 2022; P22,500,000 in 2023; and P25,000,000 in 2024. The bonus of 25% is deductible for tax purposes in each year. The tax rate is 20%. The 2022 bonus is based on profit after bonus but before taxes. Compute the amount of the bonus for 2022.
Transcribed Image Text:Orlando Company has a contract with its CEO to pay him a bonus during each of the years 2021 – 2024. The profit before deductions for bonus and income taxes were P14,500,000 in 2021; P18,000,000 in 2022; P22,500,000 in 2023; and P25,000,000 in 2024. The bonus of 25% is deductible for tax purposes in each year. The tax rate is 20%. The 2022 bonus is based on profit after bonus but before taxes. Compute the amount of the bonus for 2022.
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