Valix Finacc vol 2 Problem 1-46 and 47

Financial Accounting Volume 2 2008 Valix-Peralta
Chapter 1 Problem 1-46 and 47

Problem 1-46  Answer  B

B             =  .10 (1,650,000 – B)

B             =  165,000 - .10B

B + .10B  =  165,000

1.10B      =  165,000

B             =  165,000 / 1.10

B             =  150,000

                                                                                                                                                 

Problem  1-47  Answer  A

Income after bonus and tax (260,000 / 10%)                                                      2,600,000

Income before tax (2,600,000 / 65%)                                                                    4,000,000

Income before bonus and tax (4,000,000 + 260,000)                                         4,260,000

Proof

Income before bonus and tax                                                                              4,260,000

Less: Bonus                                                                                                                   260,000

Income before tax                                                                                                  4,000,000

Less: Tax (35% x 4,000,000)                                                                                       1,400,000

Income after bonus and tax                                                                                 2,600,000