The incomplete income statement of Perreault Corp. follows.

The employee profit-sharing plan requires that 20% of all profits remaining after the deduction of the bonus and income taxes be distributed to the employees by the first day of the fourth month following each year end. The income tax rate is 45%, and the bonus is tax-deductible.
Instructions
(a) Complete the condensed income statement of Perreault Corp. for the year 2011. You will need to develop two simultaneous equations to solve for the bonus amount: one for the bonus and one for the tax.
(b) Prepare the journal entry to record the bonus at December 31, 2011.

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PERREAULT CORP Income Statement For the Year 2011 $10,000,000 7,000,000 3,000,000 Revenue Cost of goods sold Gross profit Administrative and selling expenses Profit-sharing bonus to employees Income before income taxes Income taxes Net income $1,000,000