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Included in revenue is $12m for the receipts that the company’s audit have advised are commission sales. The costs of these sales, paid for by Petra, were $8m. $3m of the profit of $4m was attributable to and remitted to sharma( the auditors have advised that Sharma is the principal for these transaction.) Both the $8m and $3m paid to Sharma have been included in cost of sales.
It’s the answer is
Dr sale $12m
Cr cost of sale $12m
commission accrued $1m
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