The terms and conditions of employment with The Pleasing Company include entitlement to share in the staff bonus system, under which 5% of the profits for the year before charging the bonus are allocated to the bonus pool, provided the annual profits exceed P50 million. The profits (before accrual of any bonus) for the first half of the year amount to P40 million and the latest estimate of the profits (before accrual of any bonus) for the year as a whole is P60 million. How much should be recognized in profit or loss in respect of the staff bonus for the first half of the year, according to PAS 34? O P15 million O P3.0 million O P2.0 million Nil
The terms and conditions of employment with The Pleasing Company include entitlement to share in the staff bonus system, under which 5% of the profits for the year before charging the bonus are allocated to the bonus pool, provided the annual profits exceed P50 million. The profits (before accrual of any bonus) for the first half of the year amount to P40 million and the latest estimate of the profits (before accrual of any bonus) for the year as a whole is P60 million. How much should be recognized in profit or loss in respect of the staff bonus for the first half of the year, according to PAS 34? O P15 million O P3.0 million O P2.0 million Nil
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The terms and conditions of employment with The Pleasing Company include entitlement to share in the staff bonus system, under which 5% of the profits for the year
before charging the bonus are allocated to the bonus pool, provided the annual profits exceed P50 million. The profits (before accrual of any bonus) for the first half of the
year amount to P40 million and the latest estimate of the profits (before accrual of any bonus) for the year as a whole is P60 million.
How much should be recognized in profit or loss in respect of the staff bonus for the first half of the year, according to PAS 34?
O P1.5 million
O P3.0 million
O P2.0 million
O Nil
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