us of 25% is deductible for t r. The tax rate is 20%.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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12:16 Ь Ьь.
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%.
Compute the amount of the bonus for 2021 if the
bonus is based on profit bonus and taxes.
Transcribed Image Text:12:16 Ь Ьь. 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%. Compute the amount of the bonus for 2021 if the bonus is based on profit bonus and taxes.
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