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Show the solution on how the Bonus is computed

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Question - N Company has an agreement to pay the sales manager a bonus if 5% if the entity's earnings. The income for the year before bonus and tax is 5,250,000. The income tax rate is 30% of income after bonus.

Required - Show the solution on how the Bonus is computed. (Refer to the formula)

1. Bonus is a certain percent of income before bonus and before tax. 262,500.

2. Bonus is a certain percent of income after bonus but before tax. 250,000.

3. Bonus is a certain percent of income after bonus and after tax. 177,536.

4. Bonus is a certain percent of income after tax but before bonus. 186,548.

Reference no: EM132567080

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