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Wewaii [24]
2 years ago
15

Sometimes compensation packages include bonuses designed to provide performance incentives to employees. The difficulty a bonus

can cause accountants is not an accounting problem, but a math problem. The complication is that the bonus formula sometimes specifies that the calculation of the bonus is based in part on the bonus itself. This occurs anytime the bonus is a percentage of income because expenses are components of income, and the bonus is an expense.
Regalia Fashions has an incentive compensation plan through which a division manager receives a bonus equal to 8% of the division's net income. Division income in 2013 before the bonus and income tax was $245,000. The tax rate is 30%.

Calculate the amount of the bonus.
Business
1 answer:
kirill [66]2 years ago
7 0

Answer:

The amount of bonus=$12,992.42

Explanation:

<em>Step 1: Express the formula as one of more algebraic equations</em>

Let B=Bonus

Let T=Taxes

B=8%x($245,000–B–T) ...equation 1

T=30%x($245,000–B)...equation 2

Since we have the value of T in equation 2, we can substitute it in equation 1 above;

B=8%x{(245,000–B–30%x(245,000–B)}

B=0.08 x {245,000-B-73,500+0.3 B}

B=0.08 x {245,000-73,500-B+0.3 B}

B=0.08 x {171,500-0.7 B}

B=13,720-0.056 B

B+0.056 B=13,720

1.056 B=13,720

B=(13,720/1.056)=$12,992.42

The amount of bonus=$12,992.42

<em>Step 2: Prepare the adjusting entry to record the bonus  compensation</em>

Bonus compensation expense       12,992.42

Bonus compensation payable                                   12,992.42

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Superior Construction Co. was contracted to plaster all the buildings of a historical preservation project for $2,500,000 over t
Cerrena [4.2K]

Answer:

Gross Profit in Year 1 = $200000

so correct option is B. $200,000

Explanation:

given data

historical preservation project = $2,500,000

time = 2 year

estimated costs = $2,000,000

Actual costs Years 1 = $800,000

Actual costs Years 2 = $900,000

to find out

what amount of gross profit would Superior report in Year 1

solution

we find here first Percentage Completion that is express as

Percentage Completion = Cost to date ÷  Estimated Total Cost  .............1

put her value we get

Percentage Completion = \frac{800000}{2000000}

Percentage Completion  = 40%

and

Revenue Recognized will be here

Revenue Recognized = Percentage Completion  × Total estimated Revenue   ...............2

Revenue Recognized = 40 % × 25000000

Revenue Recognized = 1000,0000

so here Gross Profit in Year 1  will be  

Gross Profit in Year 1 = Revenue Recognized - Cost to date of year 1   ..............3

Gross Profit in Year 1 =   1000,0000 - v800000

Gross Profit in Year 1 = $200000

so correct option is B. $200,000

3 0
3 years ago
Assume that a country with an open economy has a fixed exchange-rate system and that its currency is currently overvalued in the
olasank [31]

Answer: b. The quantity of the country's currency supplied exceeds the quantity demanded.

Explanation:

A country operating a fixed-exchange rate system would be actively trading its currency to ensure that it remains at a certain rate. If the currency is overvalued, it means that the currency is actually weak and is being propped up by the company's actions in the forex market.

A reason for the weakness would be that the supply is higher than the demand of the currency which means that, as per the rules of supply and demand, the currency is trading at a lower price, i,e., it is weak.

7 0
2 years ago
A market might have an upward-sloping long-run supply curve if:
Elan Coil [88]

Answer:

a. firms have different costs.

Explanation:

A market might have an upward-sloping long-run supply curve if

a. firms have different costs.

b. consumers exercise market power over producers.

c. all factors of production are essentially available in unlimited supply.

d. the entry of new firms into the market has no effect on the cost structure of firms in the market.

6 0
2 years ago
Assume that the Quinn Corporation uses the indirect method to depict cash flows. Indicate where, if at all, stock issued for equ
trasher [3.6K]

Answer:

No, it will not be classified on cash flow statement.

Explanation:

In the given case, stocks are issued in exchange of equipment. Assuming no cash is involved even for the balancing amount.

Since, cash flow statement records all transactions involving cash the exchange of stock issued for equipment, is nowhere involving cash thus, it will not be depicted on cash flow statement.

Final Answer

No it will not be classified on cash flow statement.

4 0
3 years ago
When customers have their groceries scanned at the supermarket checkout counter, data regarding product sales and coupon redempt
Masja [62]

COMPLETE QUESTION:

When customers have their groceries scanned at the supermarket checkout counter, data regarding product sales and coupon redemptions are collected and processed by tracking services such as IRI's InfoScan. Consumer product firms such as Procter & Gamble use data collected by IRI to allocate scarce marketing resources. Which of the following data are NOT collected at retail checkout counters?

Answer: household demographics

Explanation:

Consumer product firms such as Procter & Gamble that uses data collected by IRI to allocate scarce marketing resources don't collect consumer's data that includes household demographs because in allocating scarce marketing resources household demographs are not important data.

3 0
3 years ago
Read 2 more answers
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