The incomplete income statement of Bridgeport Corp. follows. Sales revenue Cost of goods sold $10,695,000 7,535,000 Gross profit 3,160,000 Administrative and selling expenses $1,009,000 Profit-sharing bonus to employees ? ? Income before income taxes ? Income taxes Net income ? $? The employee profit-sharing plan requires that 20% of all profits remaining after the deduction of the bonus and income tax be distributed to the employees by the first day of the fourth month following each year end. Bridgeport follows ASPE, the income tax rate is 35%, and the bonus is tax-deductible. (a)

The incomplete income statement of Bridgeport Corp. follows. Sales revenue Cost of goods sold $10,695,000 7,535,000 Gross profit 3,160,000 Administrative and selling expenses $1,009,000 Profit-sharing bonus to employees ? ? Income before income taxes ? Income taxes Net income ? $? The employee profit-sharing plan requires that 20% of all profits remaining after the deduction of the bonus and income tax be distributed to the employees by the first day of the fourth month following each year end. Bridgeport follows ASPE, the income tax rate is 35%, and the bonus is tax-deductible. (a)

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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