Homework Answers
2. Amount of the bonus $12,898
| Assuming Bonus = B, Income tax = T |
| B = 6% x ($320000 - B - T) |
| T = 30% x ($320000 - B) |
| Substituting for T in the bonus formula: |
| B = 6% x [$320000 - B - 30% x ($320000 - B)] |
| B = 6% x ($320000 - B - $96000 - 0.3B) |
| B = 6% x ($224000 - 0.7B) |
| B = $13440 - 0.042B |
| 1.042B = $13440 |
| B = $13440/1.042 |
| B = $12898 |
3.
| Transaction | General Journal | Debit | Credit |
| 1 | Bonus compensation expense | 12898 | |
| Bonus compensation payable | 12898 | ||
| (To record the bonus compensation) |
4. Amount of the bonus $18113
| Assuming Bonus = B |
| B = 6% x ($320000 - B) |
| B = $19200 - 0.06B |
| 1.06B = $19200 |
| B = $19200/1.06 |
| B = $18113 |
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Sometimes compensation packages include bonuses designed to provide performance incentives to employees. The difficulty a bonus...
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Sometimes compensation packages include bonuses designed to provide performance incentives to employees. The difficulty a bonus...
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PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE.
THANK YOU!
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