Mahbub runs a recruitment agency. The agency's income is earned in the form of commissions from clients
Question:
Mahbub runs a recruitment agency. The agency's income is earned in the form of commissions from clients who pay a percentage of the first year’s salary of new employees recruited by the agency. In the year to 31 December 20X7 the total of commission income earned is £115 900. Mahbub is very pleased with this record level of commission; it is 25% higher than total commissions in the previous year.
Expenses, however, have also increased. Premises costs total £16 506, staff costs are £29900 and administration costs are £15 981. In the year to 31 December 20X6 the equivalent expenses totals were: premises £13 370;
staff costs £28 807; and administration costs £12 773.
From the information given above, prepare Mahbub’s profit and loss account for both 20X7 and 20X6. Calculate the percentage increase or decrease in net profit.
Step by Step Answer:
Financial Accounting For Non Specialists
ISBN: 9781844802050
2nd Edition
Authors: Catherine Gowthorpe