Q4. B, whose accounting year-ends on 31st May 2019 consigned 200 bags of sugar, each costing Sh300 to A of Nairobi on 1 April 2019. He paid Sh1,000 towards freight and insurance, 30 bags were damaged in transit; and on 31st May 2019, the consignor received Sh2,000 on account of the damaged bags from the insurance company.
A took delivery of the goods on 10th April 2019 and immediately accepted a bill drawn on him for Sh40,000 for 60 days. On 31st May 2019 the consignee reported that:
140 bags were sold at Sh350 per bag;
The damaged bags were sold at Sh110 per bag; and
He had incurred the following expenses:
Godown rent Sh1,400
Clearing charges Sh1,700
Carriage outwards Sh600
He is entitled to a commission of 10% on the sales proceeds of all goods sold.
If A remits the balance due by bank draft on 31st May 2019, prepare the ledger accounts in the books of B. Assume that no portion of expenses incurred by the consignee are attributable to damaged bags (5 marks).
Answers
Answer:
X, whose accounting year ends on 31st May each year, consigned 100 cases of medicine costing ~ 3,000 each to Y of Madras on 1.4.2015. he paid ~ 5,000 towards freight and insurance. 15 cases were damaged in transit and on 30.5.2015, the consignor received ~ 10,000 on account of the damaged cases from the insurance company. Y took delivery of the goods on 10.4.2015 and immediately accepted a bill drawn on him for ~ 2,00,000 for 60 days.
On 30.5.2015, the consignee reported that : (i) 75 cases were sold at ~ 4,500 per case; and (ii) he incurred the following expenses : Godown rent ~ 4,000;
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Jul 03 2021 09:24 PM
1 Approved Answer
Pritam K answered on July 05, 2021
5 Ratings,(15 Votes)
In the books of X Consignment to Madras A/C Date Particulars Amount Date Particulars Amount 1/4/2015 To goods sent on Consignment 300000 By Loss in Transit A/C(Note1) 45750 1/4/2015 To Freight & Insurance 5000 30/5/2015 By Y A/C (Sales) 337500 30/5/2015 To Y A/C 31/5/2015...
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