Question

A of Kolkata sends goods on consignment system to B of Patna invoicing them at 5% above cost. Accounts are settled every year on 30th June and 31st December. On 1st January, 2011, A sent goods to Patna costing Rs. 20,000. A paid freight Rs.1,800, insurance Rs. 500 and excise duty Rs. 400. B had to incur an expense of Rs. 300 for clearing the consignment. By 30th June, 2011, B had sold 2/3rds of the consignment for Rs. 18,00C and incurred Rs. 250 as storage and selling expenses. On the same date he remitted the proceeds after deducting his expenses and agreed commission of 5% on sale price. You are required to prepare consignment account and the personal account of B in the books of A for the period ended 30th June, 2011. Also state how the unsold goods will be shown in the balance sheet of A prepared as on 30th June, 2010. ​

Answer 1

Answer:

Cost of goods sold =

5

3

×1,00,000=Rs.60,000

Selling Price of goods sold =Rs.70,000

Ordinary Commission =2% on Rs.70,000=Rs.1,400

Now, Let the extra commission be Rs.X

Therefore, According to Problem :

X=20%[(70,000−1,400−X)−60,000]

or, X=

5

1

×(8,600−X)

or, 5X=8,600−X

or, X=

6

8,600

=1,4233

Therefore, Total Commission =Rs.(1,400+1,433)=Rs.2,833

Answer 2

Answer:

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