Rainmian Company has agreed to pay its sales manager a bonus of 5% of his or her earnings after bonuses and taxes. Before bonuses and taxes, the annual income is USD5,250,000. The income tax rate is 30% of after-bonus earnings. If the bonus has not yet been paid, how much current liability for bonus should be reported at the end of the year?
Rainmian Company has agreed to pay its sales manager a bonus of 5% of his or her earnings after bonuses and taxes. Before bonuses and taxes, the annual income is USD5,250,000. The income tax rate is 30% of after-bonus earnings. If the bonus has not yet been paid, how much current liability for bonus should be reported at the end of the year?
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 8RE: Borat Company gives annual bonuses after the end of the year. Borat computes the bonuses based on...
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Rainmian Company has agreed to pay its sales manager a bonus of 5% of his or her earnings after bonuses and taxes. Before bonuses and taxes, the annual income is USD5,250,000. The income tax rate is 30% of after-bonus earnings. If the bonus has not yet been paid, how much current liability for bonus should be reported at the end of the year?
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