Zach Corp. pays commissions to its sales staff at the rate of 3% of net sales. Sales staff are not paid salaries but are given monthly advances of $15,000. Advances are charged to commission expense, and reconciliations against commissions are prepared quarterly. Net sales for the year ended March 31 were $15,000,000. The unadjusted balance in the commissions expense account on March 31 was $400,000. March advances were paid on April 3. In its income statement for the year ended March 31 what amount should Zach report as commission expense? A. $465,000 B. $450,000 C. $415,000 D. $400,000
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- On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.Lee Cheol San Company pays commissions to its sales staff at the rate of 3% of net sales. Sales staff are not paid salaries but are given monthly advances of P15,000. Advances are charged to commission expense, and reconciliations against commissions are prepared quarterly. Net Sales for the year ended March 31, 2020 were P15,000,000. The unadjusted balance in the commissions expense account on March 31, 2020 was P400,000. March advances were paid on April 3, 2020. In its income statement for the year ended March 31, 2020, what amount should Lee Cheol San report as commission expense? A. P400,000 B. P415,000 C. P450,000 D. P465,000A company's telephone bill consists of two elements. One is a quarterly rental charge, payable in advance; the other is a quarterly charge for calls made, payable in arrears. At 1 April 20X9, the previous bill dated 1 March 20X9 had included line rental of $90. Estimated call charges during March 20X9 were $80. During the following 12 months, bills totalling $2,145 were received on 1 June, 1 September, 1 December 20X9 and 1 March 20Y0, each containing rental of $90 as well as call charges. Estimated call charges for March 20Y0 were $120. What is the amount to be charged to the statement of profit or loss for the year ended 31 March 20Y0? A $2,185 B $2,205 C $2,155 D $2,215 Please provide detailed answer with proper explanation that why and what is done .. thankyou
- Starlight Ltd. assigned $600,000 of Accounts Receivable to Moonbeam Management as security for a loan of $580,000. Moonbeam charged a 3% commission on the amount of the loan; the interest rate on the loan was 10%. During the first month, Starlight collected $320,000 of the assigned accounts, after deducting $500 of discounts. As well, Starlight accepted returns worth $2,600 and wrote off assigned accounts totalling $4,500. Entries made by Starlight during the first month would include a O debit to Accounts Receivable of $324,500. debit to Cash of $322,600. O debit to Bad Debts Expense of $4,500. debit to Allowance for Doubtful Accounts of $4,500.On November 30, accounts receivable in the amount of P900,000 were assigned to Hello Finance Co. by Maymay Incorporated as security for a loan of P750,000. Hello charged a 3% commission on the accounts; the interest rate on the note is 12%. During December, Maymay collected P350,000 on assigned accounts after deducting P560 of discounts. Maymay wrote off a P530 assigned account. On December 31, Maymay remitted to Hello the amount collected plus one month's interest on the note. REQUIRED: 1.) How much is Maymay's equity in the assigned accounts receivable as of December 31?Duke Company pays its outside salespersons fixed monthly salaries and commissions based on net sales. Sales commissions are computed and paid on a monthly basis (in the month following the month of sale) and the fixed salaries are treated as advances against commissions. However, if the fixed salaries for salespersons exceed their sales commissions earned for a month, such excess is not charged back to them. Pertinent data for the month of March 2020 for the three salespersons are as follows: Fixed salaries Net sales Commissions rate Marissa 100,000 900,000 10% Emma 150,000 2,500,000 10% Jocelyn 250,000 4,000,000 15% What should Duke Company accrue for sales commissions at March 31, 2020? 450,000 940,000 440,000 500,000
- Cabanes Factors provides financing to other companies by purchasing their accounts receivable on a non-recourse basis. Cabanes charges a commission to its clients of 15% of all receivables factored. In addition, Cabanes withholds 10% of receivables factored for protection against sales returns or adjustments. Cabanes credits the 10% withheld to Client Retainer and makes payments to clients at the end of each month so that the balance in the retainer is equal to 10% of unpaid receivables at the end of the month. Cabanes recognizes its 15% commissions as revenue at the time the receivables are factored. Also, experience has led Cabanes to establish allowance for bad debts of 4% of all receivables purchased. On January 2, 2021, Cabanes purchased receivables from Cabana Company totaling P3,000,000. Cabana has previously established an allowance for bad debts for these…Dagupan Company prepares quarterly interim financial reports. The entity sells electrical goods and normally 5% of customers claim on their warranty. The provision in the first quarter was calculated at 5% of sales to date which amounted to P10,000,000. However, in the second quarter, a design fault was found, and warranty claims were expected to be 10% for the whole year. Sales for the second quarter amounted to P15,000,000. What would be the provision charged in the second quarter’s interim income statement?Pinnacle Company prepares quarterly interim financial reports. The entity sells electrical appliances and normally 5% of the customers claim on their warranty. The provision in the first quarter was calculated at 5% of sales to date which amounted to P10,000,000.However, in the second quarter, a design fault was found and warranty claims were expected to be 10% for the whole year. Sales for the second quarter amounted to P15,000,000. What amount should be reported as warranty expense in the interim income statement for the second quarter? A. 2000000B. 1250000C. 1500000D. 750000
- At the beginning of July, ABC assigned P2,000,000 out of its P10,000,000 outstanding accounts receivable to BDOin consideration of a P1,400,000, 12% loan. BDO charged the company 5% of the loan principal as a service charge. By the end of July, ABC collected P600,000 cash from the assigned accounts net of a P50,000 sales discount. Also, by the end of July, the company accepted a customer return of merchandise amounting to P60,000. By the end of August, ABC collected another P700,000 from the assigned accounts after P40,000 sales discount. The company also wrote off P80,000 as worthless accounts by the end of August. By the end of September, ABC collected another P300,000 without sales discounts. The agreement with the bank provides a monthly remittance from customer collections and it will cover both the principal and interest. How much is the remittance of ABC to BDO by the end of September? *Freelance Factors provides financing to other companies by purchasing their accounts receivable on a non-recourse basis. Freelance charges commission to its clients of 15% of receivables factored. In addition, Freelance withholds 10% of receivables factored as protection against sales returns and other adjustments. Freelance credits the 10% withheld to Client Retainer and makes payments to clients at the end of each month so that the balance in the Retainer account is equal to 10% of the unpaid receivables at the end of the month. Freelance recognizes its 15% commissions as revenue at the time the receivables are factored. Also, experience has led Freelance to establish an Allowance for Bad Debts of 4% of all receivables purchased. On January 2, 2021, Freelance purchased receivables from Committed Company totaling P1,500,000. Committed had previously established an Allowance for Bad Debts for these receivables of P35,000. By January 31, 2021, Freelance had collected P1,200,000 on these…On August 1, a firm assigned $220,000 of its $580,000 of accounts receivable. The finance company advances 85% of the assigned accounts less a $22,000 fee. Interest is 10% and payable monthly on the beginning-of-period loan balance. A loan payment is remitted at the end of each month. Each payment includes principal and interest. The amount of each loan payment equals the cash collected on receivables during the month plus interest on the loan balance. If $100,000 was collected on accounts receivable during August, on the first loan payment, how much should be debited to Interest Expense?