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Scranton Company expects to begin operating on July 1, Year 1. The company's master budget contained the following operating expense budget: July August September Salary

Scranton Company expects to begin operating on July 1, Year 1. The company's master budget contained the following operating expense budget:

July August September
Salary expense $ 38,000 $ 38,000 $ 38,000
Sales commissions, 5% of sales 32,000 34,000 26,000
Utilities 3,200 3,200 3,200
Depreciation on store equipment 1,400 1,400 1,400
Rent 7,600 7,600 7,600
Miscellaneous 2,200 2,200 2,200
Total operating expenses $ 84,400 $ 86,400 $ 78,400

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:

Multiple Choice

$32,000.

$36,200

$26,000.

$34,000.

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