(a) Raj of Gwalior consigned 15,000 kgs of Ghee at 30 per kg to his agent Siraj at Delhi. He spent 5 per kg as freight and insurance for sending the Ghee at Delhi. On the way 100 kgs. of Ghee was lost due to the leakage (which is to be treated as normal loss) and 400 kgs. of Ghee was destroyed in transit. 9,000 was paid to consignor directly by the Insurance company as Insurance claim.
Siraj sold 7,500 kgs. at 60 per kg. He spent 33,000 on advertisement and recurring expenses.
You are required to calculate :
(i) The amount of abnormal loss.
(ii) Value of stock at the end and
(iii) Prepare Consignment account showing profit or loss on consignment, if Siraj is entitled to 5% commission on sales.
Answers
Answer:
this is the answer for this question
(i) The amount of abnormal loss is ₹14,000
To calculate abnormal loss, Total units lost in abnormal loss = 400 * (cost per unit = ₹30 + freight = ₹5)
= 400 * 35 = 14,000
(ii) Value of stock at the end is ₹2,46,690
To calculate closing stock,
particulars quantity amount
goods sent on consignment 15,000 4,50,000
add: expenses of consignor +75,000
less: normal loss -(100)
14,900 5,25,000
less: abnormal loss -(400) -(14,000)
14,500 5,11,000
less: goods sold -(7,500)
7,000 5,11,000
Closing stock = 5,11,000 / 14,500 * 7,000
=2,46,690
(iii) Here is the consignment account:
Particulars amount particulars amount
To goods sent on By Siraj 4,50,000
consignment 4,50,000 By abnormal loss 14,000
To bank (freight) 75,000 By closing stock 2,46,690
To Siraj (expenses) 33,000
To Siraj (commission) 22,500
To profit 1,30,190
Total 7,10,690 7,10,690