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Consignment Accounts

Q.1. On June 10, 1987 RAj & Co. of Bombay consigned 100 cases of red wine to Singham Bros. of Ceylon . The cost of consignment amounted to Rs.7500 but the goods were charged at invoice price so as to show a profit of 25% on invoice price. On the same date, the consignors paid Rs.600 for freight and insurance. on July 1, the consignees paid Rs.1000 for import duty, Rs.200 for dock dues and remiited a bank draft for Rs.4000 as an advance against the Consignment. On July 15, they sold 80 cases for Rs.10,500. Singham Bros. are entitled to a commission of 5% on gross sale proceeds as their remuneration. Show the entries in the Books of the consignor and the consignee, assuming that the consignee has remiitted the balance due from them by draft .

Q.2. Modi textiles, Delhi consigned to Vinod Enterprises, Calcutta, 100 cotton bails. The invoice price of each bail was Rs.1500 which includes 20% profit on invoice price. The consignor paid Rs.2500 for insurance and Rs.4000 for carriage and freight. The consignee received cotton bails and sold 75 bails for cash and realised Rs.112500. He incurred Rs.1800 on godown rent and was allowed 10% commission on sales . 5 cotton bails were spoiled in godown and they are to be valued at 50% depreciation. Show consignment account in the books of Modi Textiles. ( hint : the damaged goods are also to be included in stock and they will be valued at 50% of invoice price and the proportionate expenses.

asked Jan 30, 2016 in Consignments by Jasmine (6 points) 251 views
edited Jan 30, 2016 by Jasmine

1 Answer

0 votes

Q.1:  Notes:

1. Receipt from Singham Bros.

Rs.10500 – (Rs.1200 + Rs.4000 + Rs.525) = Rs.4775

2. Value of Closing Stock = (10000 + 600 + 1200) X 20/100 = Rs.2360

3. Value of stock reserve = 2500 X 20/100 = 500


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answered Jan 31, 2016 by jbsclasses (3,969 points)