Bonus Obligation Raymond Moss, vice president of Moss Auto Parts, gets an annual bonus of 15% of

Question:

Bonus Obligation Raymond Moss, vice president of Moss Auto Parts, gets an annual bonus of 15% of net income after bonus and income taxes. Income before bonus and income taxes is $250,000. The effective income tax rate is 30%.

Required
1. Compute the amount of Raymond Moss’s bonus.
2. Compute the income tax expense.