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 6% of the divisions net income. Division income in 2018 before the bonus and income tax was $225,000. The tax rate is 30%. Required: 2. Calculate the amount of the bonus. 3. Prepare the adjusting entry to record the bonus compensation. 4. Bonus arrangements take many forms. Suppose the bonus specifies that the bonus is 6% of the divisions income before tax, but after the bonus itself. Calculate the amount of the bonus.

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C https:/ tian.aomMonnecthm Check my work mode: This shows what is correct or incorrect for the work you have completed so fer. It does not indicate completion Return to queston ometunes coxnperisalwxi paackages mekude bonuses designed to provle perfoormmance iriceritives io erriplkzyees. The difficul onus can cause accountants is not an accountin problem, but a math problem. I he complication is that the bonus tormula ormetmes specifies that the. ralrulation ofthe bonus ls besed in part c n the hcnie; itself Thes orrurs anytime thr bonus is ercentage of income because expenises are components of income, and the bonus is an experse. eyalka Fastuore: has an iriceniivee conperisatnxi plan through whuch a drvexi rnanager receives a bonus equ et income. Division income in 2018 before the bonus and income tax was $225,000. Ihe tax rate is 30% 2. Calculate the amount of the bonus 3. Prepxare the adjustinig entry Ito record the bonus comperezalior Bonus arrangements take many torms. Suppose the bonus speche fter thr bonus itself Cakrulate the amcunt af thr bonus & Answer is not complete. Complete this question by entering your answers in the tahs below. Required 2 Rquired 3Required 4 Calkulate the amount of the banuso nat round i dollar amount. calculations and round your ansners to the nearest whole $ 10,112 Required 2 Required 3 > Activate Windows to Setlings to activate Windons O lype hene to search