Huang Inc. has a contract with its president, Ms. Shen, to pay her a bonus during each of the years 2014, 2015, and 2016. Assume a corporate income tax rate of 30% during the three years. The profit before deductions for bonus and income tax was $250,000 in 2014, $308,000 in 2015, and $350,000 in 2016. The president's bonus of 12% is deductible for tax purposes in each year and is to be calculated as follows:

1. In 2014, the bonus is to be based on profit before deductions for bonus and income tax.

2. In 2015, the bonus is to be based on profit after deduction of bonus but before deduction of income tax.

3. In 2016, the bonus is to be based on profit before deduction of bonus but after deduction of income tax.

Instructions

Calculate the amounts of the bonus and the income tax for each of the three years.