Italy company has an incentive compensation plan under which a branch manager received 10% of the branch income after deduction of the bonus but before deduction of income tax. Branch income for the current year before the bonus and income tax was P2,475,000. The tax rate was 30%. What is the bonus for the current year?Belarus company decided to offer a bonus to the branch manager of 25% of income over P1,500,000 earned by the branch during the current year. The income for the branch was 2,400,000 before tax and before bonus for the current year. The bonus is computed on income in excess P1,500,000 after deducting the bonus but before deducting tax. What is the bonus for the current year?Vilnius company has an agreement to pay the sales director a bonus of 5% of the entity’s earnings. The income for the year before bonus and tax is P2,625,000. The income tax rate is 30% of income after bonus. What is the amount of bonus if it is based on a percent of income after bonus and after income tax?Bratislava company has an incentive compensation plan under which the president is to receive a bonus equal to 10% of income in excess P500,000 before deducting income tax but after deducting the bonus. The income before income tax and the bonus is P1,6000,000. What is the amount of the bonus?Tang company is the defendant in a lawsuit filed by wong in 2019 disputing the validity of copyright held by tang. In December 31, 2019, tang determined that wong would probably be successful for an estimated amount of P600,000. Appropriately, a P600,000 loss was accrued by a charge to income for the year ended December 31, 2019. On December 31, 2020, tang and wong agreed to a settlement copyright to wong. The carrying amount of the copyright on tang’s accounting records was P90,000 on December 31, 2021. What would be the increased in tang’s income before tax in 2020 due to this settlement?

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Italy company has an incentive compensation plan under which a branch manager received 10% of the branch income after deduction of the bonus but before deduction of income tax. Branch income for the current year before the bonus and income tax was P2,475,000. The tax rate was 30%. What is the bonus for the current year?
Belarus company decided to offer a bonus to the branch manager of 25% of income over P1,500,000 earned by the branch during the current year. The income for the branch was 2,400,000 before tax and before bonus for the current year. The bonus is computed on income in excess P1,500,000 after deducting the bonus but before deducting tax. What is the bonus for the current year?
Vilnius company has an agreement to pay the sales director a bonus of 5% of the entity’s earnings. The income for the year before bonus and tax is P2,625,000. The income tax rate is 30% of income after bonus. What is the amount of bonus if it is based on a percent of income after bonus and after income tax?
Bratislava company has an incentive compensation plan under which the president is to receive a bonus equal to 10% of income in excess P500,000 before deducting income tax but after deducting the bonus. The income before income tax and the bonus is P1,6000,000. What is the amount of the bonus?
Tang company is the defendant in a lawsuit filed by wong in 2019 disputing the validity of copyright held by tang. In December 31, 2019, tang determined that wong would probably be successful for an estimated amount of P600,000. Appropriately, a P600,000 loss was accrued by a charge to income for the year ended December 31, 2019. On December 31, 2020, tang and wong agreed to a settlement copyright to wong. The carrying amount of the copyright on tang’s accounting records was P90,000 on December 31, 2021. What would be the increased in tang’s income before tax in 2020 due to this settlement?

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