Consider a company that has reported an income of sh 1,200,000 computed without subtracting either the bonus or corporation taxes. The bonus is to be based on income after taxes but after deducting bonuses. The corporation tax rate is 30% and the bonus payable is 15%. Required; i. Calculate the bonus and tax payable ii. Show the double entry in respect of bonus and income taxes payable. Example 2 Z limited is a dealer in electronic products. The sales contract provides for one year warranty 31st and product quality guarantee. During the year ended December 2011 the company sold 10,000 units. The management estimates the following; Description % of sales Estimated cost per unit Minor defects 5% sh 850 Major defects 1.5% sh 4,800 Manufacturers replacements 0.2% sh 18,200 Required; i. Compute the amount that should be set aside to cater for the product service warranty ii. During the year ended 31/12/2012 the company estimates to pay sh 800,000 and forward a provision of sh 760,000. Prepare the provision account