Question

On 1stSeptember 2002 goods which cost X Rs.33,OOOwere consigned by him to his agent

Y at a proforma price which was 20% over cost. X paid insurance and freight charges

amounting to Rs.1,250. Y was allowed Rs.3,OOOper annum towards establishment cost,

5% commission on gross sales and 3% del credere commission. He was also allowed 5%

extra commission on the profit on such consignment sales after charging such

commission. Y incurred an expense of Rs.255 as landing charges.

3/4ths of goods were sold at 331/3% profit on cost, half of which were on credit,

half of the balance of goods was damaged and claim on insurance company was made

for Rs.4,400 which was settled at a discount of 10%.

You are required to prepare a consignment account and abnormal loss account in

the books of X for the year ended 31stDecember 2002.​

Answer 1

Answer:

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