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| Kerr receives an annual $25,700 base salary for working the territory in |
| Arizona. A quota of $900,000 in sales has been set for that state. Kerr |
| receives an 8 percent commission on all sales in excess of $900,000. |
| This year, the sales are $965,000. The total earnings due Kerr this year |
| are |
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- During the last five months of the year, Dwana opens a new Internet telecommunications business called Dwan-Com. Dwan-Com bills 50,000 of revenues, but receives only 40,000 cash. Dwan-Com incurs 3,000 of supply expenses, and 41,000 of labor costs. Dwan-Com pays for 2,200 of the supplies and 38,000 of the labor costs in the current year. a. What is Dwan-Coms taxable income if it elects the cash method of accounting? b. What is Dwan-Coms taxable income if it elects the accrual method of accounting? c. What method of accounting do you recommend that Dwan-Com elect?Kenz Limited employs its staff on a five-day working week. The weekly salaries is $15,000 and employees are paid in arrears on Friday. That is, when the employees are paid, the salaries paid are for work performed in the preceding week. Kenz Limited retains $5,000 per week to pay the Inland Revenue Department for pay-as-you-earn (PAYE) tax on behalf of the employees and $1,000 per week to pay staff medical benefits. Tax and medical benefits are paid on the following Monday and Tuesday of each week respectively. The end of the reporting period falls on a Wednesday. RequiredPrepare the accounting entries necessary to record the salary on balance day and its payments.Mikoy is a firm engineer receiving a basic monthly salary of 45,000.00 and commission on al sales of 2% Compute for his gross earnings for the month if he sold 1,500,000.00
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