1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Wewaii [24]
3 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]3 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

You might be interested in
Let's say you just bought a new home and you did not get a home warranty and your builder-seller has tried to fix your leaking r
fiasKO [112]
Fire him and get a new builder
3 0
3 years ago
The following items are found in the financial statements.
Oksana_A [137]

Answer:

(a) Discount on bonds payable  ⇒ SHOULD BE REPORTED IN THE BALANCE SHEET UNDER LIABILITIES

(b) Interest expense (credit balance)  ⇒ WHEN INTEREST EXPENSE IS INCLUDED IN THE INCOME STATEMENT IT HAS A DEBIT BALANCE, WHEN IT HAS A CREDIT BALANCE IT MEANS IT IS A LIABILITY AND MUST BE REPORTED IN THE BALANCE SHEET

(c) Unamortized bond issue costs  ⇒ SHOULD BE REPORTED IN THE BALANCE SHEET, IT IS A CONTRA LIABILITY ACCOUNT

(d) Gain on repurchase of debt  ⇒ SHOULD BE REPORTED IN THE INCOME STATEMENT AS PART OF OTHER GAINS AND LOSSES

(e) Mortgage payable (payable in equal amounts over next 3 years)  ⇒ SHOULD BE REPORTED IN THE BALANCE SHEET UNDER LIABILITIES (UNDER CURRENT AND LONG TERM LIABILITIES)

(f) Debenture bonds payable (maturing in 5 years) ⇒ SHOULD BE REPORTED IN THE BALANCE SHEET UNDER LONG TERM LIABILITIES

(g) Notes payable (due in 4 years)  ⇒ SHOULD BE REPORTED IN THE BALANCE SHEET UNDER LONG TERM LIABILITIES

(h) Premium on bonds payable   ⇒ SHOULD BE REPORTED IN THE BALANCE SHEET UNDER LIABILITIES (REDUCES BONDS PAYABLE)

(i) Bonds payable (due in 3 years) ⇒ SHOULD BE REPORTED IN THE BALANCE SHEET UNDER LONG TERM LIABILITIES

5 0
3 years ago
Gillian reprimands an employee in front of his peers for speaking out of turn during a sales meeting. Which of the following typ
kykrilka [37]

Answer:

The correct answer is the option B: Negative reinforcement.

Explanation:

To begin with, in the field of behavioral psychology and business management the concept known as "Reinforcement" refers to the action or process of changing or keeping someone's behavior by the action of having an specific reaction that will be negative or positive accepted by the individual whose behavior we are looking to change or maintain. Therefore that the reinforcement is followed by a particular stimulus that the individual normally has when making the action that we want to change or keep.

The negative reinforcement refers to the process of producing a consequence with the purpose of avoiding or trying to stop certain stimulus so that the individual will stop that behavior in order to avoid the consequence.

8 0
3 years ago
Jane Spring maintained this record of vehicle expenses for last year: gas, $845.96; oil, lube, miscellaneous, $68.85; insurance,
allochka39001 [22]

Answer:

Depreciation: $4,000.00

Variable costs : $914.81  

Explanation:

The value of the car when new = $19,860.00

Values after two years =$11,860.00

Accumulated depreciation for two years

= $19,860.00 - $11,860.00

=$8,000.00

Assuming straight depreciation method, depreciation each of the two years

=$8,000.00/2

=$4,000.00

Variable costs are the cost that changes with usages. In this case, variable costs are gas and oil, lube, and miscellaneous.

Variable costs =  $845.96 +  $68.85

Variable costs =  $914.81    

 

7 0
3 years ago
Read 2 more answers
Describe at least two non-discretionary expenses that you expect to have at some point in your life.
ad-work [718]

Answer:

Non-Discretionary Expenses means payments made to third parties on account of: (a) mandatory payments of monthly debt service (but not payment of principal or interest at or after maturity) required under Loan Documents evidencing debt of the Venture or any Subsidiaries; (b) Emergency Expenses; (c) other non-

Explanation:

3 0
3 years ago
Other questions:
  • The City of Twizzle issues $10,000,000 face value of general obligation bonds for $9,800,000. The bonds will be used for the con
    13·2 answers
  • Compute the present value of​ $46,000, invested for six years at​ 8%. Present value of​ $1: ​5% ​6% ​7% ​8% ​9% 3 0.864 0.840 0.
    10·1 answer
  • What is the name for utter business ruin or failure
    15·1 answer
  • True or false?
    11·1 answer
  • ABC common stock has been moving up recently and one of your clients purchased several hundred share of the stock this morning.
    8·1 answer
  • How is value added different from profit
    11·1 answer
  • An electronics firm is currently manufacturing an item that has a variable cost of $ 0.50 per unit and a selling price of $ 1.00
    15·1 answer
  • LinkedIn targets a specific demographic: working professionals. They tend to be older and better educated. Why might advertisers
    10·1 answer
  • A union might increase the demand for the labor services of its members by Multiple Choice decreasing the demand for the product
    15·1 answer
  • Find the APR, or stated rate, in each of the following cases (Do not round intermediate calculations. Enter your answers as a pe
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!