Question

A consigned to B 5,000 kgs of tea costing Rs.40 per kg. A incurred Rs.3,000 on freight and Rs.2,000 on
A
insurance. 500kgs of tea were lost in transit. The insurance company admitted the claim for Rs. 15,000.
After receiving the goods, B spent Rs.1,000 on carriage, Rs. 500 on selling and Rs. 500 on godown rent.
B was allowed a commission of 5% on sales. 3,000kgs of tea were sold at Rs.64 per kg and 25kgs of tea
were lost due to breakage of
chest which
considered to be normal.
Required: Prepare Consignment A/c and in the Books of B - A Alc. (working notes should form part of
your answer)
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Answer 1

Answer:

Correct option is

B

Rs. 3,95,000

Cost of good per unit = Rs 800 per kg

Number of goods lost in transit = 500 kg

Cost of goods lost in transit = Cost of good per unit × Number of goods lost

= 800×500

= 4,00,000

Insurance received = 4,00,000

Expenses incurred on lost goods = 20,000×

2,000

500

= 5,000

Net loss on abnormal account = Cost of goods lost in transit + expenses incurred − Insurance recieved

=4,00,000+5,000−4,00,000

=5,000.