7.

Calculation of Bonus
Profit = 650,000 5% bonus on profit Income Tax = 30% gross profit = 928,571

1. Bonus is computed based on profit before deduction of bonus and income tax.
(650,000 / 0.7) x 0.05 = 46,429

2. Bonus is computed based on profit after deduction of bonus but before dedcution of income tax.
(928,571 x 0.05) / 1.05 = 44,218

3. Bonus is computed based on profit before deduction of bonus but after dedcution of income tax.
650,00 x 0.05 = 32, 500

4. Bonus is computed based on profit after deduction of bonus and income tax.
(650,00 x 0.05) / 1.05 = 30,952