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AA, president of AA77 Company, has a bonus arrangement with the company under which he...

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Accounting

AA, president of AA77 Company, has a bonus arrangement with the company under which he receives 10% of profit (after taxes and bonuses) each year. For the current year, the profit before deducting either the provision for income taxes or the bonus is P4,000,000. The tax rate is 30%.

1. Determine the amount of bonus received by AA for the current year.

2. Compute the appropriate provision for income tax for the year

3. Assuming that the bonus amounted to 350,000 how much should be the company's profit?

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