On March 2, 2010, Knight Company's CFO, Bob Martin, Will

question 83

Essay

On March 2, 2010, Knight Company's CFO, Bob Martin, will receive a bonus equal to 6% of net income before income taxes as reported for the year ended December 31, 2009. The current 2009 income statement shows net income before income taxes as $600,000.
Required:
(1) What journal entry should be made on December 31, 2009?
(2) What journal entry should be made on March 2, 2010?
(3) If Bob decides to postpone $50,000 of 2009 research and development expenditures until 2010, what impact would this have on his bonus? Explain and show your calculations.

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Definitions:

Interstitial Fluid

The liquid found in the spaces between cells, providing means of delivering nutrients and removing waste.

Cartilage

A flexible, rubbery connective tissue found in various parts of the body like joints, rib cage, and ear structure.

Collagen And Elastin

Proteins found in connective tissues, with collagen providing tensile strength and elastin allowing tissues to resume their shape after stretching or contracting.

Extracellular Matrix

A complex network of proteins and carbohydrates surrounding cells, providing structural and biochemical support to tissues and organs.