How to prepare consignment account & consignee account.

A consignment of 20000 kg of tea costing R:s 50 per kg. was sent on consignment basis on 1st Feb., 2015 to an agent to be sold on a commission of 5 % on gross sales. The following expenses were incurred by the consignee.
1 Fright & Insurance Rs. 4000
2 Dock charges & salaries Rs.1600
3 Godown , Rent & Insurance Ra,2000
4 Misc. Expenses Ra,3000
Some packages containing 4000 kgs. of tea were damaged in transit and had to be destroyed on landing as having become unfit for sale. 14000 kgs of tea were sold at Rs. 60 per kg up to 28th Feb., 2015, the date of closing of account. The balance of consignment remained unsold.
Draw up consignment account & consignee account in the books of consignee showing the amount due from the consignee on 28th Feb., 2015.

asked Aug 2, 2015 in Consignments by Anwar khan (2 points) 1,939 views

1 Answer

0 votes

Notes: 1. As the goods destroyed have been disposed of by the consignee after receiving them, that is why all the expenses incurred up to point of receipt by the consignee have been added to the cost of Abnormal Loss.

2. Administrative and sales expenses incurred are never added to the cost of Closing Stock because those expenses don't add to the value of the stock.

answered Aug 2, 2015 by jbsclasses (3,971 points)

Thank U very much Sir.

My please Anwar.