c) The Company neglected to record sales commissions earned by sales staff during the fourth...
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c) The Company neglected to record sales commissions earned by sales staff during the fourth quarter of the current year (i.e., October-December). The company's sales commission agreements call for a commission of 3% of the gross profit on each sale to be paid to sales staff on the first day of the quarter following the quarter in which the sale occurs. Sales totaled $640,000 and cost of sales totaled $336,000 for the fourth quarter. Sales revenues and cost of sales were properly recorded. If the company had properly reflected this activity during 2006, what would be the correct amounts for the following items? Selling, general and administrative expenses? Total shareholders' equity? Current liabilities? Retained Earnings? 2
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