Lowen Homes, Inc. pays its sales personnel 6% commission of the selling price of each home. During November of 2015, sales people sold $18,400,000 of homes. During December, 2015, sales people sold $20,050,000 of homes. Because its policy is to pay commissions only in the month after the sales, Lowen paid commissions during December for November, 2015. During January of 2016, Lowen paid its sales people commissions for December, 2015.
A If the cash basis of accounting is used, how much is reported commission expense on Lowen Homes' income statement for December of 2015?
B If the accrual basis of accounting is used, how much is reported as commission expense on Lowen Homes' December income statement for 2015?

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The Answer of Lowen Homes, Inc. pays its sales personnel 6% commission of the selling price of each home. During November of 2015, sales people sold $18,400,000 of homes. During December, 2015, sales people sold $20,050,000 of homes. Because its policy is to pay commissions only in the month after the sales, Lowen paid commissions during December for November, 2015. During January of 2016, Lowen paid its sales people commissions for December, 2015.
A If the cash basis of accounting is used, how much is reported commission expense on Lowen Homes' income statement for December of 2015?
B If the accrual basis of accounting is used, how much is reported as commission expense on Lowen Homes' December income statement for 2015?