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

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 10P: Bonus Obligation and Income Tax Expense James Kimberley, president of National Motors, receives a...

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Bonus Obligation and Income Tax Expense James Kimberley, president of National Motors, receives a bonus of 10% of Nationals profits above 1,500,000, before the bonus and the corporations income taxes are deducted. Nationals effective income tax rate is 21%. Profits before income taxes and his bonus are 5,000,000 for 2019. Required: 1. Compute the amount of Kimberleys bonus for 2019. 2. Compute National Motors income tax expense for 2019. 3. Prepare journal entries at the end of 2019 to record the bonus and income taxes. 4. Show how the bonus and income taxes would be reported on National Motors December 31,2019, balance sheet.
Lemur Corp. is going to pay three employees a year-end bonus. The amount of the year-end bonus and the amount of federal income tax withholding are as follows. Lemurs payroll deductions include FICA Social Security at 6.2%, FICA Medicare at 1.45%, FUTA at 0.6%, SUTA at 5.4%, federal income tax as previously shown, state income tax at 5% of gross pay, and 401(k) employee contributions at 2% of gross pay. Record the entry for the employee payroll on December 31.
Suppose that Blake Companys total pretax difference from a change to FIFO was 100,000 and the company pays a bonus of 5% of its income before income taxes and bonus to employees. If Blake pays an additional bonus | based on the change in income, would it recognize any expense? If so, when and how much?
In 2019, Magenta Corporation paid compensation of 45,300 to the participants in a profit sharing plan. During 2019, Magenta Corporation contributed 13,200 to the plan. a. Calculate Magentas deductible amount for 2019. b. Calculate the amount of any contribution carryover from 2019.
Pinecone Company has plan assets of 500,000 at the beginning of the current year and expects to earn 12% on its plan assets during the year. Pinecones service cost is 230,000, and its interest cost is 55,000. Compute Pine-cones pension expense for the current year.
On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.
The terms and conditions of employment with the SM Inc. 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 P50,000,000. The profits (before accrual of any bonus) for the first half of 2021 amount to P40,000,000 and the latest estimate of the profits (before accrual of any bonus) for the year as a whole is P60,000,000. How much should be recognized in profit or loss in respect of the staff bonus for the half year to June 30, 2021, according to IAS 34 Interim financial reporting?
Rice Ltd agrees to contribute 5% of employees’ total remuneration into a post- employment plan each period. In the year ended 31 December 2020, the company paid total salaries of $10.5 million. A bonus of $3million based on the income for the period was paid to the employees in March 2021. The company had paid $510,00 into the plan by 31 December 2020. Required: Calculate the total profit or loss expenses for post-employment benefits for the year and the accrual which will appear in the statement of financial position at 31 December 2020.
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?
Century Company has a bonus agreement which provides that the general manager shall receive an annual bonus of 5% of the profit after bonus and tax. The income tax rate is 30%. The general manger received P120,000 for the current year as bonus. What is the income before tax?
Yel Co. has a bonus agreement which provides that the general manger shall receive an annual bonus of 10% of the net income after bonus and tax. The income tax rate is 30%. The general manager received P 280,000 for the current year as bonus. What is the income before bonus and tax? * A.4,280,000 B.3,720,000 C.4,000,000 D.2,800,000
JIMIN Company has an agreement to pay the executive officers a bonus of 5% of the entity’s earnings. Theincome for the year before bonus and tax is ₱8,750,000. The income tax rate is 30% of income after bonus.Requirements: Determine the BONUS under each of the following independent assumptions:A. Bonus is based on income before bonus and before tax.B. Bonus is based on income after bonus and after tax.C. Bonus is based on income after bonus but before tax.D. Bonus is based on income after tax but before bonus