Natural Company has an agreement to pay the sales manager a bonus of 10% of the entity's earnings. The income for the year before bonus and tax is P5,250,000. The income tax rate is 25%. 1. Compute the bonus after bonus and taxes. 2. Compute the bonus after tax but before bonus.

Natural Company has an agreement to pay the sales manager a bonus of 10% of the entity's earnings. The income for the year before bonus and tax is P5,250,000. The income tax rate is 25%. 1. Compute the bonus after bonus and taxes. 2. Compute the bonus after tax but before bonus.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 15E

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Question

Natural Company has an agreement to pay the sales manager a bonus of 10% of the entity's earnings. The income for the year before bonus and tax is P5,250,000. The income tax rate is 25%.

1. Compute the bonus after bonus and taxes.
2. Compute the bonus after tax but before bonus.

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