For the Year Ended December 31,2010,Mason Company Has Implemented an Employee

question 42

Multiple Choice

For the year ended December 31,2010,Mason Company has implemented an employee bonus program equal to 7% of Mason's net income,which employees will share equally.Mason's net income (pre-bonus) is expected to be $3,500,000,and bonus expense is deducted in computing net income.What is the amount that needs to be recorded for estimated bonus liability for 2010?

• A)$245,000
• B)$144,118
• C)$228,972
• D)$50,000
• E)$125,000

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Definitions:

Raw Materials Purchased

The total cost of raw materials bought by a company for use in production during a specific time period.

Job Order Cost Sheet

A record maintained for each job in a job order costing system, detailing the materials, labor, and overhead costs incurred.

Internal Control

Processes and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Cost Of Goods Sold

An expense measured as the direct costs attributable to the production of the goods sold by a company, including material and labor costs.