Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Amazon Corp income statement accounts at 12/31, adjusted for all items except bonus and income taxes is given below DR CR. Sales 1,300,000 Cost of

Amazon Corp income statement accounts at 12/31, adjusted for all items except bonus and income taxes is given below

DR CR.

Sales 1,300,000

Cost of Goods sold 700,000

Operating Expense

Salaries 200,000

Depreciation 50,000

Office EXP 60,000

MISC EXP 40,000

  1. Income before bonus and tax is:
  2. Calculate the amount of bonus and tax under each of the following independent assumptions (the income tax rate is 40%)
    1. The bonus is equal to 10% of income before bonus and tax
    2. The bonus is equal to 10% of income after bonus but before tax
    3. The bonus is equal to 10% of income before bonus but after tax
    4. The bonus is equal to 10% of income after both bonus and tax

For each of the four independent cases described in part 1,

  1. make the entries required at 12/31 to adjust salary expense and to record income tax expense.
  2. construct an income statement at 12/31.

Please show work and how you found the answer, thank you

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting An IFRS Perspective In Romania

Authors: Adriana Dutescu

1st Edition

3030294870, 978-3030294878

More Books

Students also viewed these Accounting questions

Question

Explain the solution.

Answered: 1 week ago