Fisher Company Pays Its Executives a Bonus of 4 Percent

Multiple Choice

Fisher Company pays its executives a bonus of 4 percent of income before deducting the bonus and income taxes.For the quarter ended March 31,20X1,Fisher had income before the bonus and income tax of $10,000,000.For the year ended December 31,20X1,Fisher estimates that its income before bonus and income taxes will be $50,000,000.For the quarter ended March 31,20X1,what is the amount of the bonus that Fisher should deduct on its income statement?

A) $100,000
B) $400,000
C) $500,000
D) $2,000,000