ACCT 349 help A Guide to career/Snaptutorial ACCT 349 help A Guide to career/Snaptutorial | Page 19

a.$320,000
b.$3,125,000
c.$8,000,000
d.$2,000,000
e.None of the above
5.Using the information in question 4, ROI is:
$500,000 ÷ $2,000,000 = 25%
a.5%
b.10%
c.15%
d.20%
e.None of the above
6.(CPA) Marsh Inc. has an incentive compensation plan under which
its president is paid a bonus equal to 10% of Marsh’s income after
deducting the bonus but before deducting income taxes. For the year
ended December 2010, Marsh’s income was $110,000 before
deducting the bonus and income taxes. Marsh had income taxes of
$40,000 in 2010. How much bonus should Marsh pay its president for
2010?
Let B = Bonus
B = ($110,000 – B) x 0.10
B = $11,000 - 0.10B
1.10B = $11,000
B = $11,000/1.10 = $10,000
The income taxes of $40,000 should not be used in computing the
bonus.
a.$0
b.$7,000
c.$10,000
d.$11,000
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