Answered: Wed Company has an incentive…

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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Wed Company has an incentive compensation plan under which a branch manager received 10% of the branch’s income
after deduction of the bonus but before tax. Branch income for the year before the bonus and income tax was P2,475,000.
Tax rate is 35%. What is the amount of bonus for the current year?
a. P189,000 c. P247,500
b. P270,000 d. P225,000

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