Chargers president earns a bonus equal to 10 percent of, Ask an Expert

Accounting

Charger Electronics had the following items that require adjusting entries at the end of the year.

1. Charger pays its employees $2,500 every Friday. This year December 31 falls on a Thursday.

2. Charger earned income of $150,000 for the year for tax purposes. Its effective tax rate is 30 percent. These taxes must be paid by April 15 of next year.

3. Charger borrowed $50,000 with a note payable dated October 1. This note specifies 8 percent. The interest and principal are due on March 31 of the following year.

4. Charger's president earns a bonus equal to 10 percent of income in excess of $100,000. Income for the year was $150,000. This bonus is paid in May of the following year and any expense is charged to wages expense.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M981130

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