Question

X sent Y 10 machines each cost RS.4000 and spent the following amounts towards the consignment.Freight RS.2000; insurance RS.500; carriage RS.300.Y Paid the following expenses:Duty RS.1400; Entry tax RS.400; Godown rent RS.1000; salary , other administration expensive RS. 1,500. end of the year Y report that he has sold only 8 of the machines for RS.47000. you are required to arrive value of closing stock in consignment.

Answer 1

Total value of consignment:

Machines 4000

Freight 2000

Insurance 500

Carriage 300
Duty 1400
Entry tax 400

Total : 8600 (10 machines)

Closing stock 2 (10 less 8 sold)

Value of Closing consignment

8600/10x2 = 1720.