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Garfield Company pays its general manager an annual bonus.
For the year 2015, the company reported profit of P8, 000,000 before deductions for bonus and corporate income taxes. The corporate income tax is 30%
REQUIRED:
Question 1: Determine the amount of bonus under each of the following assumptions:
(a) Bonus is 8% of profit before deduction for both bonus and income taxes.
(b) Bonus is 8% of profit after deduction for bonus but before deduction for income taxes.
(c) Bonus is 8% of profit before deduction for bonus but after deduction for income taxes.
(d) Bonus is 8% of profit after deduction for both bonus and income taxes.
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