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    Ia2 Prob 1-32 & 33

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    maryani
    The branch manager of Gretchen Company is eligible for a bonus of 25% of income over P1,000,000. The branch income was P1,600,000 before tax and bonus. The bonus is calculated on income exceeding P1,000,000 after deducting the bonus but before deducting tax. Therefore, the bonus for the current year is P150,000. Jackson Company's president is eligible for a 10% bonus on income over P1,000,000, calculated before deducting tax but after deducting the bonus. With pre-tax, pre-bonus income of P3,200,000 the bonus amounts to P200,000.

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    Ia2 Prob 1-32 & 33

    Uploaded by

    maryani
    185 views1 page
    The branch manager of Gretchen Company is eligible for a bonus of 25% of income over P1,000,000. The branch income was P1,600,000 before tax and bonus. The bonus is calculated on income exceeding P1,000,000 after deducting the bonus but before deducting tax. Therefore, the bonus for the current year is P150,000. Jackson Company's president is eligible for a 10% bonus on income over P1,000,000, calculated before deducting tax but after deducting the bonus. With pre-tax, pre-bonus income of P3,200,000 the bonus amounts to P200,000.

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    ia2 prob 1-32 & 33

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    ia2 prob 1-32 & 33

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    The branch manager of Gretchen Company is eligible for a bonus of 25% of income over P1,000,000. The branch income was P1,600,000 before tax and bonus. The bonus is calculated on income exceeding P1,000,000 after deducting the bonus but before deducting tax. Therefore, the bonus for the current year is P150,000. Jackson Company's president is eligible for a 10% bonus on income over P1,000,000, calculated before deducting tax but after deducting the bonus. With pre-tax, pre-bonus income of P3,200,000 the bonus amounts to P200,000.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    185 views1 page

    Ia2 Prob 1-32 & 33

    Uploaded by

    maryani
    The branch manager of Gretchen Company is eligible for a bonus of 25% of income over P1,000,000. The branch income was P1,600,000 before tax and bonus. The bonus is calculated on income exceeding P1,000,000 after deducting the bonus but before deducting tax. Therefore, the bonus for the current year is P150,000. Jackson Company's president is eligible for a 10% bonus on income over P1,000,000, calculated before deducting tax but after deducting the bonus. With pre-tax, pre-bonus income of P3,200,000 the bonus amounts to P200,000.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Problem 1-32 (AICPA Adapted)

    After three profitable years, Gretchen Company decided to offer a bonus to the branch
    manager of 25% of income over P1,000,000 earned by the branch during the current year.

    The income for the branch was P1,600,000 before tax and before bonus for the current
    year.
    The bonus is computed on income in excess of P1,000,000 after deducting the bonus but
    before deducting tax.

    What is the bonus for the current year?


    a. 120,000 b. 150,000 c. 250,000 d. 320,000

    Problem 1-33 (AICPA Adapted)

    Jackson Company has an incentive compensation plan under which the president is to
    receive a bonus equal to 10% of income in excess of P1,000,000 before deducting income
    tax but after deducting the bonus. The income before income tax and the bonus is P3,
    200,000.

    What is the amount of the bonus?

    a. 220,000 b. 200,000 c. 320,000 d. 440,000

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