Washington Corporation Provides an Incentive Compensation Plan Under Which Its

Washington Corporation provides an incentive compensation plan under which its president is to receive a bonus equal to 10 percent of Washington's income in excess of $100,000 before deducting income tax but after deducting bonus. If income before income tax and bonus is $320,000 and the effective tax rate is 40 percent, the amount of the bonus should be

A) $20,000.
B) $22,000.
C) $32,000.
D) $44,000.

Correct Answer:

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