Raymond Moss, vice president of Moss Auto Parts, gets an annual bonus of 15% of any income, before deducting bonus and income taxes, above $100,000. Income before bonus and income taxes is $250,000. The effective income tax rate is 30%.

Bonus amount = $ 37,500

Income tax expense = $ 62,500

Step-by-step explanation:

To find the bonus, we have to calculate 15% of $ 250,000.

15% × 2,50,000  

So the bonus amount is $ 37,500.

To find the income tax expense, we have to subtract bonus from the sum of bonus and income tax as,

$ 100,000 - $ 37,500 = $ 62,500