Q4. H. Ltd forwarded on 1st December 2011, 500 mobile phones to Mohan of Kanpur to be sold on behalf of H Ltd. The cost of each mobile phone was Rs. 3000 but the invoice price was Rs. 4000. H Ltd. incurred expenses amounting to Rs. 3800 for sending goods. Mohan received consignment on 10th December 2011 and accepted a 3 months’ bill of Exchange drawn on by him by H Limited for Rs. 8,00,000. Mohan paid Rs. 15000 as rent and Rs. 8000 as other expenses. By 31st March 2012, Mohan had sold 400 mobile phones at Rs. 4200 each. Mohan was entitled to a commission of 10% on sales including a del-credere commission of 2%. One-fifth of the sales was on credit. A customer to whom 5 mobile phones were sold was declared insolvent. Mohan could not recover anything from his estate. Prepare consignment account and Mohan’s account in the books of H Ltd. and H. Limited Account in the books of Mohan.
Answers
Explanation:
. Ltd forwarded on 1st December 2011, 500 mobile phones to Mohan of Kanpur to be sold on behalf of H Ltd. The cost of each mobile phone was Rs. 3000 but the invoice price was Rs. 4000. H Ltd. incurred expenses amounting to Rs. 3800 for sending goods. Mohan received consignment on 10th December 2011 and accepted a 3 months’ bill of Exchange drawn on by him by H Limited for Rs. 8,00,000. Mohan paid Rs. 15000 as rent and Rs. 8000 as other expenses. By 31st March 2012, Mohan had sold 400 mobile phones at Rs. 4200 each. Mohan was entitled to a commission of 10% on sales including a del-credere commission of 2%. One-fifth of the sales was on credit. A customer to whom 5 mobile phones were sold was declared insolvent. Mohan could not recover anything from his estate. Prepare consignment account and Mohan’s account in the books of H Ltd. and H. Limited Account in the books of Mohan.