For the year ended 12/31/02, ABC companny has implemented an employee bonus program equal to 3% of ABC's net income before bonus expenses, which employees will share equally. ABC's net income before bonus expenses is expected to be $500,000 and the bonus expense is computed off of that.
Compute the amount of bonus payable to employees at year end.
Prepare the journal entry @ 12/31/02 to record the bonus due to employees.
Prepare the journal entry @ 1/19/03 to record the payment of the bonus to employees.
The bonus expense will be 3% of $500,000 = $15,000.
The entry to record the bonus due the ...
This solution looks at how to calculate and prepare journal entries for recording and paying out employee bonuses.