Ask Experts Questions for FREE Help !
Ask
    rbrumfield's Avatar
    rbrumfield Posts: 2, Reputation: 1
    New Member
     
    #1

    Apr 19, 2009, 04:09 PM
    Compute bonuses and prepare journal entries
    Chris Anger is the president of Anger Company, and his brother, George Anger, is the vice president. Their compensation package includes bonuses of 5% for Chris Anger and 4% for George Anger of net income that exceeds $325,000. Net income for the year 2009 has just been computed to be $745,000.
    1. Compute the amount of bonuses to be paid to Chris and George Anger.
    2. Prepare the journal entries to record the accrual and payment of the bonuses.
    Summarize all withholding taxes related to the bonuses in an account called Various
    Taxes Payable. Taxes payable on the bonuses total $8,400 for Chris and $6,720 for
    George.
    dawgsnkats's Avatar
    dawgsnkats Posts: 130, Reputation: 7
    Junior Member
     
    #2

    Apr 19, 2009, 04:30 PM

    745K-325K= 420K as the basis over 325K. Chris =420X5% or 21K and George=420x4% or 16,800.

    Accrual Entry is: Bonuses Expense 37,800
    Various Taxes Payable 15,120
    Cash 22,680
    dawgsnkats's Avatar
    dawgsnkats Posts: 130, Reputation: 7
    Junior Member
     
    #3

    Apr 19, 2009, 04:31 PM
    Sorry, Bonus is debited, Taxes and Cash are credited.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Journal Entries & Adjusting Journal Entries [ 2 Answers ]

Nov. 15- Purchased $1,600 of merchandise on account from Martin Co, terms 1/30; paid $60 of associated freight charges in cash. My answer: Merchandise Inventory $1600 Accounts Payable $1600 Cash $60 Freight Expense $60...

Prepare the necessary journal entries to clear the Intangible Assets account? [ 1 Answers ]

8/1/07 Purchased copyright (8 year life estimated) 160,000 9/1/07 Research and Development Costs 135,000

Prepare balance sheets, show net income, compute debt ratio [ 1 Answers ]

I have an accounting problem in which a list of assets and liabilities are given for 2007 and 2008. I am also given some transactions that happened toward the end of 2008involving purchasing land/building in which some is a note payable for the balance, some stock was purchased and dividends are...


View more questions Search