ABC Co. distributes annual bonus to its sales manager. The company reported P2 million profit for 2021 before bonus and income tax. Income tax of ABC Co. is 25%. What is the amount of bonus if bonus is computed at 10% of profit after taxes and bonuses?

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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ABC Co. distributes annual bonus to its sales manager. The company reported P2 million profit for 2021 before bonus and income tax. Income tax of ABC Co. is 25%.

What is the amount of bonus if bonus is computed at 10% of profit after taxes and bonuses?

 
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