At the start of the year an agent for a product owed the company £800 commission for sales targets met by the company in the previous year. This year the company made the targets again. The agent for the product paid £12,000 over the course of the year, but still owes the company £500 at the year end. What amount will appear in the income statement for the year?

Question

Quizplus · Accepted Answer

The agent paid £12,000 over the course of the year, but still owes the company £500 at the year end. So the agent paid £12,000 - £500 = £11,500 in commission for the year. However, the agent also owed the company £800 commission for sales targets met in the previous year. So the total amount of commission paid by the agent for the year is £11,500 + £800 = £12,300.

At the Start of the Year an Agent for a Product