Question

Ram Das of Hyderabad consigned goods costing Rs. 72,000 to Prakash of Cochin at a pro-forma invoice price which is cost plus a profit of 1/6th on invoice price. The consignor paid Rs. 1,800 as insurance and other charges. Prakash received the goods and paid Rs. 3,000 for freight and other charges. He was allowed 3% commission on gross sales. 3/4th of the goods were sold at 33.33% profit on cost, half of which were credit sales. Half of the balance was stolen, but the stock being insured, a claim was lodged for Rs. 8,000 and was settled for Rs. 7,000. Balance of stock was valued at proforma invoice price. Write up the Consignment and the Abnormal Loss Accounts.

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Answer 1

Answer:yes

Explanation:

In the books of consignor:

Sales=72000₹

Insurance expense=1800₹

Sold goods for cash =47999₹

Sold goods on credit= 47999₹

Goods stolen as per pro forma invoice price= 72,000/2= 36000₹

Insurance claimed= 7000₹

Abnormal loss to profit and loss statement= (72000/2)-7000= 29000₹

Cash and bank= 47999₹

Reduce receivables account by 47999₹

In the books of the agent:

Interest received= 2880₹

Carriage inward expenses= 3000₹

Now if you use double entry, use these values and journalise them accordingly.