Question: Able Co. provides an incentive compensation plan under which its president receives a bonus equal to 10% of the corporations income before income tax but

Able Co. provides an incentive compensation plan under which its president receives a bonus equal to 10% of the corporation’s income before income tax but after deduction of the bonus. If the tax rate is 40% and net income after bonus and income tax was $360,000, what was the amount of the bonus?

a. $36,000

b. $60,000

c. $66,000

d. $90,000

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