Modi textiles, Delhi consigned to Vinod Enterprises, Calcutta 100 cotton
bales. The invoice price of each bale was Rs 1,500 each which includes 20%
profit oa invoice price. The consignor paid Rs. 2,500 for insurance and Rs
4,000 for carriage and freight. The consignee received cotton bales and sold 75
bales for cash and realised Rs 1.12.500. He incurred Rs 1,800 on godown rent
und was allowed 10% commission on sales. 5 cotton bales were spoiled in
godown and they are to be valued at 50% depreciation. Show consignment
account in the books of Modi Textiles.
Answers
Given :
Cotton bales = 100
Invoice price of each bale = 1,500
Profit = 20%
Consignor paid for insurance = 20%
Consignor paid for carriage and freight = 4,000
Sold cotton bales = $75
Realised amount = 1,12,500
Godown rent = 1,800
Commission = 10%
Spoiled cotton bales = 5
Depreciation = 50%
To Find :
Show consignment account in the books of Modi Textiles?
Solution :
Consignment Account
In the Books of Modi Textiles
Particulars Amount Particulars Amount
in Rs. in Rs.
To Goods sent on 120,000 By Vinod A/c 112,500
Consignment Account
To Bank A/c 6,500 By Stock on Cons. 31,300
To Vinod A/c 13,050 By Loading on goods 30,000
To Stock Reserve 6,000 sent on consignment
To Profit and Loss A/c 34,575 By Abnormal Loss A/c 6,325
Total 180,125 180,125
Working Notes:
a. Valuation of Abnormal Loss
5 cotton bales at 1,200 each 6,000
(5 × 1,200)
+ Proportionate Direct Expenses
by Consignor 325
(6,500 × 5 ÷ 100)
Total 6,325
b. Valuation of Unsold Stock
20 Cotton Bales at Rs.1,500 each 30,000
(20 × 1,500)
+ Proportionate direct expense
of Consignor 1,300
(6,500 × 20 ÷ 100)
Total 31,300
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