On March 2, 2017, Knight Company's CFO, Bob Martin, Will

question 75

Essay

On March 2, 2017, Knight Company's CFO, Bob Martin, will receive a bonus equal to 6% of income before income taxes as reported for the year ended December 31, 2016. The current 2016 income statement shows income before income taxes as $600,000.
Required:
(1) What journal entry should be made on December 31, 2016?
(2) What journal entry should be made on March 2, 2017?
(3) If Bob decides to postpone $50,000 of 2016 research and development expenditures until 2017, what impact would this have on his bonus? Explain and show your calculations.

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Definitions:

Negative-Pressure Wound Therapy (NPWT)

A medical treatment where a vacuum dressing is used to enhance and promote wound healing in acute, chronic, and burn wounds.

Pressure Ulcers

Injury to skin and underlying tissue resulting from prolonged pressure on the skin.

Diabetic Ulcers

Open sores or wounds that occur in individuals with diabetes, typically on the lower extremities, due to reduced blood flow and neuropathy.

Venous Stasis Ulcers

Wounds that occur on the legs or ankles due to poor blood flow in the veins, often related to varicose veins or deep vein thrombosis.