Scranton Company Expects to Begin Operating on July 1,Year 1

question 86

Multiple Choice

Scranton Company expects to begin operating on July 1,Year 1.The company's master budget contained the following operating expense budget: $\begin{array}{lrrr}&\text { July } & \text { August }& \text { September }\\\text { Salary expense } & \$ 36,000 & \$ 36,000 & \$ 36,000 \\\text { Sales commissions, } 5 \% \text { of sales } & 30,000 & 32,0000& 24,000 \\\text { Utilities } & 2,800 & 2,800 & 2,800 \\\text { Depreciation on store equipment } & 1,000& 1,000 & 1,000 \\\text { Rent } & 7,200 & 7,200 & 7,200 \\\text { Miscellaneous } & \underline{1,800 }& \underline{1,800 }& \underline{1,800}\\\text { Total operating expenses } &\underline{ \$ 78,800} &\underline{ \$ 80,800 }&\underline{ \$ 72,800}\end{array}$
Sales commissions are paid in cash in the month following the month in which the expense is recognized.All other expense items requiring cash payment are paid in the month in which they are recognized.The amount of commissions payable that would appear on the company's pro forma balance sheet as of September 30,Year 1 is:

• A) $32,000.
• B) $30,000.
• C) $36,000.
• D) $24,000.

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Definitions:

Monocytes

a type of white blood cell that plays a significant role in the immune system by engulfing and digesting pathogens and cellular debris.

WBCs

White Blood Cells; cells of the immune system that are involved in protecting the body against both infectious disease and foreign invaders.

Macrophages

A type of white blood cell part of the immune system, responsible for detecting, engulfing, and destroying pathogens and cellular debris.

Lymphocytes

A type of white blood cell that plays an essential role in the body’s immune response, involved in protecting the body against antigens.