A marine company pays its sales personnel 6% commission of the selling price of each yacht. During November 2019, yacht sales totaled $20,400,000. During December 2019, sales totaled $25,100,000. Because its policy is to pay commissions only in the month after the sales, the company paid commissions during December for November 2019. During January 2020, the company paid its sales people commissions on December 2019 sales.
A)If the cash basis of accounting is used, how much commission expense is reported on the income statement for December 2019?
B)If the accrual basis of accounting is used, how much commission expense is reported on the income statement for December 2019?

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The Answer of A marine company pays its sales personnel 6% commission of the selling price of each yacht. During November 2019, yacht sales totaled $20,400,000. During December 2019, sales totaled $25,100,000. Because its policy is to pay commissions only in the month after the sales, the company paid commissions during December for November 2019. During January 2020, the company paid its sales people commissions on December 2019 sales.

A Marine Company Pays Its Sales Personnel 6% Commission of the Selling