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Consignment Accounts

Vijay & co of kolhapur consigned 2000 bicycles on July 18,1988 to chaudhari of madras for
Sale on the following conditions :
A) cycle may be sold at invoice price or above
B) chaudhari is entitled to a commission of 7 1/2% on invoice price of goods sold and 20%
On any excess over the invoice price.

The cost of each cycle was Rs 300 & it was invoiced at cost plus 33 1/3% at cost .vijay & co
Incurred Rs 20000 on freight and insurance . chaudhari received the consignment on July 24
& accepted a 3 months bill drawn on him by vijay & co for Rs 200000. Chaudhari paid Rs 8000
as unloading and cartage. Chaudhari also paid Rs 5000 as insurance and rent for the godown. They sold 1600 cycles
at Rs 500 each

Give ledger accounts as they would appear in the books of vijay & chaudhari.

asked Jan 28, 2016 in Consignments by Jasmine (6 points) 1,635 views

1 Answer

0 votes

Calculation of Commission:

1. Commission @7.5% on sales at invoice price (1600 x 400 x 7.5/100)                                         = Rs.48000

2. Commission @ 20% on sales exceeding sales at invoice price (800000 - 640000) x 20/100 = Rs.32000

Total                                                                                                                                                                 = Rs.80000

Invoice price is cost plus 33 1/3% of invoice price.

Invoice Price                                   = Rs.300

Load 33 1/3% of Rs.300               = Rs.100

Invoice Price (Rs.300+Rs.100)   = Rs.400

answered Jan 29, 2016 by jbsclasses (3,971 points)