Problem
Members of the sales force are paid their commissions twice a year. Commissions on sales from January - June are paid on July 10th and commissions from July - December are paid on January 10th. No entry has been made for the commissions earned during the last half of the year. Total sales from July to December were $12,149,700, but only 25.% of the sales are subject to the 7.5% commission.
This is what I think but I don't believe it's correct - Total sales subject to commission = $12,149,700 x 0.25 = $3,037,425
Commissions payable = $3,037,425 x 0.075 = $227,805.38
What would be the journal entries and how does it affect the financial statement?