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Per the contract company will operate the food service on its own credit on a profit and loss basis. Any excess profit over $160,000.00 will
Per the contract "company will operate the food service on its own credit on a profit and loss basis. Any excess profit over $160,000.00 will be split 50/50 with Client receiving 50% and company receiving 50% based on company's fiscal year".
Please note - Compass records liabilities throughout the year | P&L Reporting From Period 1, 2015 To Period 12, 2015 | Profit Center: Client A | |||||||||||
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 | 613,049 | 410,599 | 225,443 | 410,544 | 513,935 | 467,818 | 513,764 | 148,199 | 156,243 | 98,411 | 407,131 | 731,919 | 4,697,055 |
NET PRODUCT COST | 249,412 | 171,226 | 95,639 | 161,130 | 211,125 | 204,311 | 200,714 | 49,073 | 60,596 | 56749 | 165,105 | 272,096 | 1,897,176 |
TOTAL PERSONNEL COST | 231,228 | 168,979 | 118,966 | 156,315 | 187,844 | 180,752 | 212,105 | 91,474 | 61,882 | 84,017 | 250,136 | 230,290 | 1,973,988 |
TOTAL OTHER COSTS | 56,661 | 45,825 | 26,956 | 33,181 | 45,063 | 40,134 | 36,483 | 30,685 | 16,968 | 32,332 | 85,458 | 42,258 | 492,004 |
PROFIT/(LOSS) | 75,748 | 24,569 | -16,118 | 59,918 | 69,903 | 42,621 | 64,462 | -23,033 | 16,797 | -74,687 | -93,568 | 187,275 | 333,887 |
YTD PROFIT/(LOSS) | 75,748 | 100,317 | 84,199 | 144,117 | 214,020 | 256,641 | 321,103 | 298,070 | 314,867 | 240,180 | 146,612 | 333,887 |
Question 2:
Would Compass have a liability to Client A at the end of period 11, 2015?
Please show your calculation and provide the necessary entry to properly state the financials in that period of time.
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