A of Agra sent on consignment goods valued ‘ 1,00,000 to B of Mumbai on 1st March, 2016. He incurred the
expenditure of ‘ 12,000 on freight and insurance. A’s accounting year closes on 31st December. B was entitled to
a commission of 5% on gross sales plus a del-credere commission of 3%. B took delivery of the consignment by
incurring expenses of ‘ 3,000 for goods consigned.
On 31.12.2016, B informed on phone that he had sold all the goods for ‘ 1,50,000 by incurring selling expenses of
‘ 2,000. He further informed that only ‘ 1,48,000 had been realized and rest was considered irrecoverable, and
would be sending the cheque in a day or so for the amount due along with the accounts sale.
On 5.1.2017, A received the cheque for the amount due from B and incurred bank charges of ‘ 260 for collecting the
cheque. The amount was credited by the bank on 9.1.2017.
Write up the consignment account nding out the prot/loss on the consignment, B’s account, Provision for expenses
account and Bank account in the books of the consignor, recording the transactions upto the receipt and collection
of the cheque.
Answers
Answer:
A of Agra sent on consignment goods valued ‘ 1,00,000 to B of Mumbai on 1st March, 2016. He incurred the
expenditure of ‘ 12,000 on freight and insurance. A’s accounting year closes on 31st December. B was entitled to
a commission of 5% on gross sales plus a del-credere commission of 3%. B took delivery of the consignment by
incurring expenses of ‘ 3,000 for goods consigned.
On 31.12.2016, B informed on phone that he had sold all the goods for ‘ 1,50,000 by incurring selling expenses of
‘ 2,000. He further informed that only ‘ 1,48,000 had been realized and rest was considered irrecoverable, and
would be sending the cheque in a day or so for the amount due along with the accounts sale.
On 5.1.2017, A received the cheque for the amount due from B and incurred bank charges of ‘ 260 for collecting the
cheque. The amount was credited by the bank on 9.1.2017.
Write up the consignment account nding out the prot/loss on the consignment, B’s account, Provision for expenses
account and Bank account in the books of the consignor, recording the transactions upto the receipt and collection
of the cheque.
Answer:
In the books of Mr. A Consignment to Mumbai Account
2016 AMOUNT2016 AMOUNT
March1 To Goods sent on Dec. 31 By B’s A/cs 1,50,000
consignment A/c 1,00,000
To Cash A/c (freight and insurance)
12,000
To B’s A/c:
Clearance expenses 3,000
Selling expenses 2,000
Commission
@ 5% on Rs 1,50,000 7,500
Del-credere commission
@3% on Rs 1,50,000 4,500 17,000
Dec.31 To Provision for expenses 260
(Bank charges)
To Profit and loss A/c 20,740
(Profit on consignment) ____________________________________________________
1,50,000 1,50,000
---------------------------------------------------------------------------------------------------------
B’s Account
2016 AMOUNT 2016 AMOUNT
Dec. 31 To Consignment A/c Dec. 31 By Consignment A/c-
1,50,000
Clearance expenses 3,000
Selling expenses 2,000
Commission 7,500
Del-credere commission 4,500 17,000
By Balance c/d 1,33,000
1,50,000 1,50,000
2017 2017
Jan. 1 To Balance b/d 1,33,000 Jan. 5 By Bank A/c 1,33,000
Bank Account
2017 AMOUNT 2017 AMOUNT
Jan. 5 To B’s account 1,33,000 Jan. 5 By Bank charges260
Jan. 5 ________ By Balance c/d 1,32,740
1,33,000 1,33,000
----------------------------------------------------------------------------------------------------------
Provision for Expenses Account
2017 AMOUNT 2017 AMOUNT
Jan. 5 To Bank charges 260 Jan. 1 By Balance b/d 260
260 260
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