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20. Reznikov, Inc. provides an incentive compensation plan under. which its president receives a bonus equal to 10% of the corporation's income in excess of P600,000 before income tax but after deduction of the bonus. If income before income tax and bonus is P1,920,000 and the tax rate is 32%, the amount of the bonus would be a. 120,000 b. 132,000 c. 174,360 d. 192,000

20. Reznikov, Inc. provides an incentive compensation plan under. which its president receives a bonus equal to 10% of the corporation's income in excess of P600,000 before income tax but after deduction of the bonus. If income before income tax and bonus is P1,920,000 and the tax rate is 32%, the amount of the bonus would be a. 120,000 b. 132,000 c. 174,360 d. 192,000

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter3: Basic Accounting Systems: Accrual Basis
Section: Chapter Questions
Problem 5SEQ: The balance in the unearned rent account for Jones Co. as of December 31 is $1 ,20(). If Jones Co....
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17. Chapman Inc. operates a retail store and must determine the proper December 31, 20x3, year-end accrual for the following expenses: 18. . Service in advance for January 20x4 Local and toll calls for December 20x3 In its December 31, 20x3 balance sheet, Chapman should report accrued liabilities of a. 150, 750 b. 131,000 c. 128, 250 d. 126, 750 . 19. The store lease calls for fixed rent of P12,000 per month, payable at the beginning of the month, and additional rent equal to 6% of net sales over P2,500,000 per calendar year, payable on January 31, of the following year. Net sales for 20x3 are P4,500,000. An electric bill of P8,500 covering the period 12/16/20x3 through 1/15/20x4 was received January 22, 20x4. A P4,000 telephone bill was received January 7, 20x4, covering: In November and December 20x7, Litchfield Company received P792,000 for 1,000, 3-year subscriptions at P264 per issue per year, starting with the January 20x8 issue. Litchfield elected to include the entire P792,000 in its 20x7 income statement for tax purposes. What amount should Litchfield report in its 20x7 statement of financial position as unearned subscription revenue? 20. ACCNTG2♥ | 4 21. a. None b. 44,000 c. 264,000 d. 792,000 At December 31 20x7, Taystee Company had 10,000 gift certificates outstanding, which had been sold to customers during 20x7 for P100 each. Taystee operates on a gross margin of 60% of its sales. What amount of revenue pertaining to the 10,000 outstanding gift certificates should be deferred at December 31, 20x7? a. None b. 400,000 c. 600,000 d. 1,000,000 P1,500 2,500 Reznikov, Inc. provides an incentive compensation plan under which its president receives a bonus equal to 10% of the corporation's income in excess of P600,000 before income tax but after deduction of the bonus. If income before income tax and bonus is P1, 920,000 and the tax rate is 32%, the amount of the bonus would be a. 120,000 b. 132,000 c. 174,360 d. 192,000 One of Suzanne's production plants is located on the shores of Lake Taal. The lake has been rising for a number of years, and the company has installed dikes to prevent flooding. The dikes are currently operating at or near capacity. Weather forecasters have predicted that the lake will rise another 8 inches this coming summer (20x8). If this occurs significant damage will likely result from stressing the dikes beyond capacity. Suzanne Company estimated a P4,000,000 to P6,000,000 amount of loss should the flooding will not be prevented. In its 20x7 financial statements, Suzanne Company should report a. An accrued liability of P4,000,000 only b. An accrued liability of P5,000,000 only c. An accrued liability of P6,000,000 only d. Only a note disclosure is required
Transcribed Image Text:17. Chapman Inc. operates a retail store and must determine the proper December 31, 20x3, year-end accrual for the following expenses: 18. . Service in advance for January 20x4 Local and toll calls for December 20x3 In its December 31, 20x3 balance sheet, Chapman should report accrued liabilities of a. 150, 750 b. 131,000 c. 128, 250 d. 126, 750 . 19. The store lease calls for fixed rent of P12,000 per month, payable at the beginning of the month, and additional rent equal to 6% of net sales over P2,500,000 per calendar year, payable on January 31, of the following year. Net sales for 20x3 are P4,500,000. An electric bill of P8,500 covering the period 12/16/20x3 through 1/15/20x4 was received January 22, 20x4. A P4,000 telephone bill was received January 7, 20x4, covering: In November and December 20x7, Litchfield Company received P792,000 for 1,000, 3-year subscriptions at P264 per issue per year, starting with the January 20x8 issue. Litchfield elected to include the entire P792,000 in its 20x7 income statement for tax purposes. What amount should Litchfield report in its 20x7 statement of financial position as unearned subscription revenue? 20. ACCNTG2♥ | 4 21. a. None b. 44,000 c. 264,000 d. 792,000 At December 31 20x7, Taystee Company had 10,000 gift certificates outstanding, which had been sold to customers during 20x7 for P100 each. Taystee operates on a gross margin of 60% of its sales. What amount of revenue pertaining to the 10,000 outstanding gift certificates should be deferred at December 31, 20x7? a. None b. 400,000 c. 600,000 d. 1,000,000 P1,500 2,500 Reznikov, Inc. provides an incentive compensation plan under which its president receives a bonus equal to 10% of the corporation's income in excess of P600,000 before income tax but after deduction of the bonus. If income before income tax and bonus is P1, 920,000 and the tax rate is 32%, the amount of the bonus would be a. 120,000 b. 132,000 c. 174,360 d. 192,000 One of Suzanne's production plants is located on the shores of Lake Taal. The lake has been rising for a number of years, and the company has installed dikes to prevent flooding. The dikes are currently operating at or near capacity. Weather forecasters have predicted that the lake will rise another 8 inches this coming summer (20x8). If this occurs significant damage will likely result from stressing the dikes beyond capacity. Suzanne Company estimated a P4,000,000 to P6,000,000 amount of loss should the flooding will not be prevented. In its 20x7 financial statements, Suzanne Company should report a. An accrued liability of P4,000,000 only b. An accrued liability of P5,000,000 only c. An accrued liability of P6,000,000 only d. Only a note disclosure is required
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