Question

Mr. Achut of Mumbai consigned 100 units of a commodity to Mr. Rao of Delhi. The
goods were invoiced at 150 so as to yield a profit of 50 per cent on cost. Mr. Achut incurred
1,000 on freight and insurance. Mr. Rao incurred 500 on freight and 800 on rent. He sold
50 units for cash at 160 per unit and 20 units at 175 per unit on credit. He retained his
commission of 6 per cent (including del-credere) and remitted the balance. Mr. Rao noticed
that 10 units were damaged on account of bad packing and were saleable only for 80 per
unit. A debtor for 1,000 to whom the goods were sold by Mr. Rao became insolvent and only
50 paise in a rupee was recovered.
Prepare Consignment Account in the books of Achut and Achut Account in the books of Rao.
Can someone help with this Consignment sum, having problem with the damaged 10 units and how much is the Del-credere commission in the 6%​

Answer 1

Answer:

Explanation:

EXPENSES        AMOUNT               REVENUE                     AMOUNT

To good sent                                     By sale

on consignment                                 cash-(50*160)=8000

(100*150)                  15000                credit-(20*175) =3500       11500            

To freight &                                       By Damaged good sale      800

insurance                 1000                        (10*80)

To Mr.Rao                                           By stock in hand               3000

freight =500                                        (20*150)                                

rent=800                  1300                  By loss                             3238

To commission          738

( Mr.Rao)  

To loss on bad debt  500

TOTAL                    18538                                                          18538    

Working note: calculation of del credere commission

del credere commission is calculated on both cash and credit sale.

total sale = cash sale + credit sale + damaged unit sale

= 8000+3500+800=12300

commission = 12300*6%= 738.

 # SPJ2