Mr. Clarke, the plant supervisor, is allowed a bonus of 10% of income after bonus and tax. The tax rate is 30% and income before bonus and tax amounts to $200,000. Required: Compute the amount of Mr. Clarke's bonus.

Mr. Clarke, the plant supervisor, is allowed a bonus of 10% of income after bonus and tax. The tax rate is 30% and income before bonus and tax amounts to $200,000. Required: Compute the amount of Mr. Clarke's bonus.

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 15E

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Concept explainers

Payroll Entries

Payroll is a comprehensive record of employees that are paid by the company. Payroll classifies employees into various categories according to their function and pays scale (basic wage, allowance, income tax, other taxes, employee loans, etc.). Payroll processes form the bedrock of every organization as it contains sensitive information on the ‘wage and paycheck’ portion of the company’s strength—its employees. The organization needs to keep a track of the employees currently on the payroll, the net payout for the company, the record of transactions related to the employees including deductions and payroll taxes to identify the liability and its effect on the balance sheet (and other financial statements). Payroll records also include qualitative factors such as the conduct of the employee.

Question

100%

am.100.

a bonus of 10% of income after
Mr. Clarke, the plant supervisor, is allowed
bonus and tax. The tax rate is 30% and income before bonus and tax amounts to
$200,000.
Required:
Compute the amount of Mr. Clarke's bonus.

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