Question

Scranton Company expects to begin operating on July 1, Year 1. The company's master budget contained the following operating expense budget: July August September Salary expenses $ 36,000 $ 36,000 $ 36,000 Sales commissions, 5% of sales 30,000 32,000 24,000 Utilities 2,800 2,800 2,800 Depreciation on store equipment 1,000 1,000 1,000 Rent 7,200 7,200 7,200 Miscellaneous 1,800 1,800 1,800 Total operating expenses $ 78,800 $ 80,800 $ 72,800 Sales commissions are paid in cash in the month following the month in which the expense is recognized. All other expense items requiring cash payment are paid in the month in which they are recognized. The amount of commissions payable that would appear on the company's pro forma balance sheet as of September 30, Year 1 is:

Multiple Choice

$32,000.

$30,000.

$36,000.

Answer 1

September sales commission would be commission payable at the end of September 30

So The amount of commissions payable that would appear on the company's pro forma balance sheet as of September 30, Year 1 is: $24000

So answer is $24000