Winters,Inc

question 23

Multiple Choice

Winters,Inc. ,pays its managers a bonus consisting of 7% of net income (income after deduction of both bonus and income taxes) .The company's income tax rate is 20%.Income for the current year is $600,000. How much bonus would be paid for the current year (rounded to whole dollars) ?

• A) $42,000
• B) $33,600
• C) $31,818
• D) $31,248

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Definitions:

Debit

In accounting, a debit is an entry that increases asset or expense accounts, or decreases liability, equity, or revenue accounts.

Form 940

A tax form filed by employers to report annual Federal Unemployment Tax Act (FUTA) taxes.

Filed Annually

Describes documents, forms, or reports that are required to be submitted once every year.

Wage and Tax Statement

A document, often referred to as a W-2 form in the United States, that an employer provides to employees annually for tax filing purposes.