The sales manager of the Walbrook Company receives an annual bonus of 10% of net income after
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Question:
The sales manager of the Walbrook Company receives an annual bonus of 10% of net income after bonus and taxes. In 2015, Walbrook’s income, before bonus and taxes, was $400,000. The effective tax rate is 30%.
Required:
a. Compute the sales manager's bonus and the income tax expense for the Walbrook Company.
b. Why does Walbrook compute the sales manager bonus after taxes and the bonus?
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