Question
Company agrees to pay Client the following incremental volume incentive based on annual Caf and Catering Sales at all Locations under this Agreement: Annual Combined
Company agrees to pay Client the following incremental volume incentive based on annual Caf and Catering Sales at all Locations under this Agreement: Annual Combined Net Caf & Catering Sales Volume Incentive $8,000,000-$9,999,999 = 4.00% $10,000,000-$11,999,999 = 4.25% $12,000,000-$14,999,999 = 4.50% $15,000,000-$16,999,999 = 5.00% $17,000,000+ = 5.50%
Please note - Compass records liabilities throughout the year | P&L Reporting From Period 1, 2015 To Period 12, 2015 | Profit Center: Client C | |||||||||||
Period | 1, 2015 | 2, 2015 | 3, 2015 | 4, 2015 | 5, 2015 | 6, 2015 | 7, 2015 | 8, 2015 | 9, 2015 | 10, 2015 | 11, 2015 | 12, 2015 | TOTAL |
TOTAL SALES | 1,732,040 | 1,611,670 | 1,858,902 | 1,619,261 | 1,842,207 | 1,802,552 | 2,207,373 | 2,024,065 | 1,881,086 | 2,047,443 | 1,530,778 | 1,845,760 | 22,003,137 |
NET PRODUCT COST | 1,187,541 | 904,283 | 953,846 | 891,832 | 970,109 | 1,009,812 | 1,096,504 | 1,008,839 | 982,144 | 1,069,752 | 890,088 | 965,530 | 11,930,280 |
TOTAL PERSONNEL COST | 1,133,232 | 959,757 | 982,787 | 1,029,647 | 963,413 | 1,045,159 | 1,123,650 | 1,001,210 | 956,945 | 1,075,766 | 908,111 | 922,431 | 12,102,108 |
TOTAL OTHER COSTS | 297,593 | 246,569 | 270,103 | 237,250 | 250,486 | 223,110 | 291,457 | 284,196 | 300,564 | 304,549 | 249,987 | 268,456 | 3,224,320 |
PROFIT/(LOSS) | (886,326) | (498,939) | (347,834) | (539,468) | (341,801) | (475,529) | (304,238) | (270,180) | (358,567) | (402,624) | (517,408) | (310,657) | (5,253,571) |
YTD PROFIT/(LOSS) | (886,326) | (1,385,265) | (1,733,099) | (2,272,567) | (2,614,368) | (3,089,897) | (3,394,135) | (3,664,315) | (4,022,882) | (4,425,506) | (4,942,914) | (5,253,571) |
Question 1:
Would Compass have a liability to the client at the end of period 4, 2015?
Please show your calculation and provide any entries necessary to properly state the financials in that period of time.
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