Denzel was very pleased with the proposal, commenting that the $2,400,000 1s exactly the same as what the company would have paid under the 15% commission rate. In addition, there would be additional savings of $75,000 from auditing fees paid to verify the agents' sales reports. In other words, general and admin expenses will decrease by $75,000. He has asked the financial controller to tidy up the proposal quickly and get the new budget approved.
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If OMS continues to sell through the independent sales agents and pays the higher commission rate (20% instead of 15%), compute the estimated sales dollars that would be required to generate the level of profit as projected in the
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- (a) Xesta Limited (XL) operates an incubation centre for its new product(s) ideas. This centre purchases raw materials and any complete output is sold at a price as part of its test marketing independently. The centre fixes prices to make a standard gross profit percentage on sales of 25%.The following information is available for the year ended 28 February 2019.Inventory (1 March 2018) Shs 243 million; purchases for the year Shs 595.6 million; purchase returns Shs 41.2 million; inventory (28 February 2019) shs 261.7 million.Required: Compute the sales made by the centre for the year ended 28 February 2019.(b)The following information relates to the main operations of Xesta Limited (XL) for the year ended 28 February 2019.1. On 1 March 2018, the summary of assets and liabilities were as follows; cash at Hand Shs 42,300,000; shs Cash at Bank Shs 40,800,000; Trade payables Shs 60,500,000 and rent outstanding Shs 2,480,000.2. The following information relates to transactions that look…Cool Kids Ltd has annual turnover of £84, 900. 85% of the sales are standard rated and 15% are zero rated. Standard rated expenses are £14, 100. All figures are exclusive of VAT.The relevant flat rate percentage for Cool Kids Ltd's trade is 11%. What is the VAT liability if Cool Kids Ltd DOES use the flat rate scheme?£9, 339£11,207£10, 927£8,107Beta Corp. has a branch in Davao City established on May 31, 2022. During 2022, the home office shipped merchandise costing P110,000 to the branch, billed at 110% of cost. At the end of the year, the branch reported sales of P200,000, operating expenses of P80,000, and a net income from its operation of P10,000. Determine the true net income of the branch.
- CVP Corporation manufactures pharmaceutical products sold through a network ofsales agents. The agents are currently paid an 12% commission on sales with a yearly bonusof 2% of profit after tax (PAT); that percentage was used when CVP prepared the followingbudgeted income statement for the calendar year ending September, 2021 CVP CorporationBudgeted Income StatementFor the Year ending September 30, 2021 (Rs ’000 omitted) Sales Rs 52,750Cost of goods soldVariable Rs 16,880Fixed 13,950 30,830Gross Profit Rs. 21,920Selling & Administrative costsCommissions Rs 6,330Fixed advertising cost 2,950Fixed administrative cost 2,530 11,810Operating Income (EBIT) Rs 10,110Fixed Interest cost 1,225Income before income taxes (EBT) Rs 8,885Income Taxes (30%) 2,666Net Income (PAT) Rs 6,219Since the completion of income statement, CVP has learned that its sales agents arerequiring a 6% increase in their commission rate (to 18%) for the upcoming year. As a result,CVP’s president has decided to…Nana Adom Company Limited is a wholesale company that deals in general goods. The following information relates to the last quarter of the year 2021. 1. Expenses: (in GHC) October November December Selling & distribution 20,000 30,000 34,000 General & administration 15,000 18,000 12,000 Bad debts 21,000 15,000 20,000 Rate 8,000 6,000 10,000 Interest charges 1,600 2,000 2,400 Depreciation expenses 30,000 10,000 10,000 Expenses are payable in the month of incurrence. 2. A contingent liability of GH¢10,000 is expected to mature in November 3. Estimated cash balance at the end of September will be GHe 5000. Cash balances should not be less than GH¢10,000. Cash can be borrowed in multiples of GH¢10,000 to finance any deficit at an interest rate of 15% per annum. 4. The sales manager's salary, which is GHe 7000 per month, is expected to increase by GH€ 1000 every month after June. 5. Motor vehicle will be purchased in November for GH$240,000. Depreciation for motor van should be calculated…Nana Adom Company Limited is a wholesale company that deals in general goods. The following information relates to the last quarter of the year 2021. 1. Expenses: (in GH¢)OctoberNovemberDecember Selling & distribution 20,000 30,000 34,000 General & administration 15,00018,00012,000 Bad debts 21,00015,00020,000 Rate 8,0006,00010,000 Interest charges 1,6002,0002,400 Depreciation expenses30,000 10,00010,000 Expenses are payable in the month of incurrence. 2. A contingent liability of GH¢10,000 is expected to mature in November 3. Estimated cash balance at the end of September will be GH¢5000. Cash balances should not be less than GH¢10,000. Cash can be borrowed in multiples of GH¢10,000 to finance any deficit at an interest rate of 15% per annum. 4. The sales manager's salary, which is GH¢ 7000 per month, is expected to increase by GH¢1000 every month after June. 5. Motor vehicle will be purchased in November for GH¢240,000. Depreciation for motor van should be calculated at 10%…
- The following information relates to Puregold Price Club Inc. (PPCI) for the year 2022. PPCI has a pricing policy that allows 30% profit on the sales price. Unearned Revenue from Gift Certificates Outstanding, January 01, 2022 - P250,000 Gift certificates sold during the year - P900,000 Gift certificates issued relating to sales promotion during the year - P100,000 Gift certificates redeemed during the year - P900,000 Gift certificates relating to the entity’s promotion that expired during the year - P12,500 Additional outstanding gift certificates expected to expire in 2022 - P6,000 How much is the unearned revenue from gift certificates outstanding at December 31, 2022? a. P331,500 b. P337,500 c. P232,050 d. P236,250The following information relates to Puregold Price Club Inc. (PPCI) for the year 2022. PPCI has a pricing policy that allows 30% profit on the sales price. Unearned Revenue from Gift Certificates Outstanding, January 01, 2022 - P250,000 Gift certificates sold during the year - P900,000 Gift certificates issued relating to sales promotion during the year - P100,000 Gift certificates redeemed during the year - P900,000 Gift certificates relating to the entity’s promotion that expired during the year - P12,500 Additional outstanding gift certificates expected to expire in 2022 - P6,000 How much is the unearned revenue from gift certificates outstanding at December 31, 2022?Q3. An entity sells 100 products for $100 each. Sales are made for cash, rather than on credit terms. The entity’s customary business practice is to allow a customer to return any unused product within 30 days and receive a full refund. The cost of each product is $60. To determine the transaction price, the entity decides that the approach that is most predictive of the amount of consideration to which the entity will be entitled is the most likely amount. Using the most likely amount, the entity estimates that three products will be returned. The entity’s experience is predictive of the amount of consideration to which the entity will be entitled. The entity estimates that the costs of recovering the products will be immaterial and expects that the returned products can be resold at a profit.REQUIREDProvide the accounting entries to record the sale, and the subsequent return of the assets, assuming that the returns occur in accordance with expectations.
- FMEL is a manufacturing company incorporated in accordance with the Mauritian Law. The company principal activity is to provide high quality of T-Shirt for the American and European market.For the year ended 31 Dec 2021, the draft income statement shows the following details:NOTES MUR MURTurnover 1 32,000,000Less: Cost of SalesOpening stock 2 1,000,000Purchase 3 24,000,000Add inward carriage 4 2,500,000Depreciation of machinery 5 1,000,000Closing stock 6 (1,500,000)Total cost of sales (27,000,000)Gross Loss 5,000,000Other incomeDividend 7 235,500Interest 8 50,000EXPENSESWages and salaries 9 975,000Rent 10 300,000Repairs 11 50,000Travelling expenses 12 125,000Legal and Professional Expenses 13 75,000Depreciation 14 70,000Interest 15 7,000Light and Heat 16 50,000Sundry Business Expenses 17 22,500Motor Vehicle Expenses 18 47,500Advertising Expenses 19 50,000 (1,772,000)Net profit before taxation 3,513,500Page 5 of 9NOTES1. Turnover has not taken into consideration the return of goods sold…choose the letter of the correct answer Fara Corporation has accounts receivable of P400,000. Its manufacturing cost approximates 35 percent of selling price. The before-tax profit margin is 16 percent, and the inventory carrying cost is 4 percent of the selling price. Sales commissions are 7 percent of sales. What is Fara's average investment in accounts receivable? a. P64,000.00b. P84,000.00c. P164,000.00d. P184,000.00e. P284,000.00Nana Adom Company Limited is a wholesale company that deals in general goods. the following information relates to the last quarter of the year 2021. Expenses: (GH¢) October November December Selling & Distribution 20,000 30,000 34,000 General & Administration 15,000 18,000 12,000 Bad debts 21,000 15,000 20,000 Rate 8,000 6,000 10,000 Interest charges 1,600 2,000 2,400 Depreciation expenses 30,000 10,000 10,000 Expenses are payable in the month of incurrence. A contingent liability of GH¢ 10,000 is expected to mature in November Estimated cash balance at the end of september will be GH¢5,000. Cash balances should not be less than GH¢10,000. Cash can be borrowed in…