CONSIGMENT ACCOUNTS

P NO - 1 PAG.NO: 236 TAXMAN

KAY SENT 500 ARTICLES TO HIS AGENT JAY AT AN INVOICE PRICE OF RS.25 PER ARTICLES AND PAID FREIGHT AND CARTAGE RS.1000/-
JAY SOLD 400 ARTICLE @ RS.40 PER ARTICLE AND SENT AND ACCOUNT SALES , DEDUCTING RS.200 FOR STORAGE CHARGES AND RS.300 FOR
SELLING EXPENSES. HE CHARGED 10% COMMISSION ON THE GROSS SALE PROCEEDS AND REMITTED THE AMOUNT DUE TO KAY
RECORD THE ABOVE MENTIONED TRANSACTIONS IN KAY'S LEDGER. SHOWING THE PROFIT EARND BY THE CONSIGNOR.

ANSWER:
IN THE BOOKS OF MR . KAY
PARTICULARS AMOUNT PARTICULARS AMOUNT
RS.P. RS.P.

TO GOODS SENT ON CONSIGNMENT 12,500BY JAYS A/C 16,000

500*25
TO BANK - EXPENSES ON CONSIGNMENT SALES (400*40)
FREIGHT AND CARTAGE 1,000
BY CLOSING STOCK 2,700
TO EXPENSES INCURRED BY JAY
TO JAY (500-400)*27
STORAGE 200COST = (12500+1000)/500 27
SELLING 300COST/UNIT = COST OF STOCK
+ EXPENSES INCURRED BY CONSIGNOR
TO JAY + FRIEGHT CHARGES INCURRED
COMMISSION (16000*10%) 1,600 BY CONSIGNEE
500 UNIT - 400 UNIT
TO PROFIT ON CONSIGNMENT 3,100100 UNIT CLOSING STOCK
27
18,700 18,700
when expenses incurred by the consignee
IN THE BOOKS OF MR . JAY consignee books
KAY A/C consignor a/c dr
to cash/bank a/c
TO BANK BY BANK commission payable to consignee
EXPENSES ON CONSIGNMENT CONSIGNMENT SALES 16,000
STORAGE 200 consignor a/c dr
SELLING 300 to commission
received
TO COMMISSION 1,600
sale proceeds
TO BANK/CASH 13,900
cash/bank a/c dr
16,000 16,000 to consignor

balance settlement
P NO -2 TAXMAN PAG. NO: 236
SHRI MEHTA OF BOMBAY CONSIGNS 1000 CASES OF GOODS COSTING RS.100/-EACH TO SHRI SUNDRAM OF MADRAS consignor a/c dr
SHRI MEHTA PAYS THE FOLLOWING EXPENSES IN CONNECTION WITH CONSIGNMENT,CARRIAGE,FREIGHT & LOADING to cash /bank a/c
CHARGES 5000/- SRI SUNDARAM SELLS 700 CASES AT RS.140 PER CASE AND INCURS
THE FOLLOWING EXPENSES, CLEARING CHARGES 850/- STORAGE 1700/- PACKING & SELLING EXPENSES 600.
IT IS FOUND THAT 50 CASES HAVE BEEN LOST IN TRANIST AND 100 CASES ARE STILL IN TRANSIT.
SRI SUNDARAM IS ENTITLED TO A COMMISSION OF 10% ON GROSS SALES
DRAW UP THE CONSIGNMENT ACCOUNT AND SUNDARAM'S A/C IN THE BOOKS OF SRI MEHTA.

ANSWER:
CONSIGNMENT ACCOUNT
IN THE BOOKS OF MR . MEHTA
PARTICULARS AMOUNT PARTICULARS AMOUNT AMOUNT
RS.P. RS.P. RS.P.

TO GOODS SENT ON CONSIGNMENT 100,000BY SUNDARAM 98,000

TO BANK - EXPENSES ON CONSIGNMENT SALES (700*140)
FREIGHT AND CARTAGE 5,000
BY STOCK LOST IN TRANSIT 5,250 105
TO EXPENSES INCURRED BY JAY (50*105)
TO CONSINEE BY CLOSING STOCK
CLEARING CHARGES 850IN HAND STOCK 15,900
STORAGE 1,700IN TRANSIT STOCK 10,500 26,400 1
SELLING EXP 600 105
TO SUNDARAM 106
COMMISSION (98000*10%) 9,800

TO PROFIT ON CONSIGNMENT 11,700

129,650 129,650
WORKING NOTE
TOTAL UNITS 1000
LESS :
LOST 50
SOLD 700 750

CLOSING STOCK UNITS 250

IN TRANSIT 100
WITH CONSIGNEE 150 1 106

COST OF CLOSING STOCK IN TRANSIT AND LOST

COST OF STOCK 100,000
CONSIGNOR EXP 5,000 105,000

COST PER UNIT 1000UNITS 105

IN THE BOOKS OF MR . SUNDARAM

MEHTA A/C

TO BANK BY BANK
EXPENSES ON CONSIGNMENT CONSIGNMENT SALES 98,000
STORAGE 1,700
SELLING 600
CLEARING CHARGE 850
TO COMMISSION 9,800

TO BANK/CASH 85,050

98,000 98,000

P NO -3 TAXMAN PAG. NO: 236

X OF CALCUTTA SENT, A CONSIGNMENT OF 500 BICYCLES COSTING RS.100 EACH TO Y OF BOMBAY. EXPENSES OF 700/-
MET BY THE CONSIGNOR. Y OF BOMBAY SPENT RS. 1500 FOR CLEARANCE AN THE SELLING EXPENSES WERE 10/-
PER BICYCLE .Y SOLD 400 BICYCLE @ RS.160/- EACH. Y WAS ENTITLED TO A FIXED COMMISSION OF RS.25/- PER BICYCLE
SOLD PLUS AN ADDITIONAL COMMISSION OF ONE FOURTH OF THE AMOUNT BY WHICH THE GROSS SALES PROCEEDS
LESS TOTAL COMMISSION THERE ON EXCEEDED A SUM CALCULATED AT THE RATE OF RS.125/- PER BICYCLE SOLD
Y SENT THE AMOUNT DUE TO X. YOU ARE REQUIRED TO SHOW THE CONSIGNMENT ACCOUNT AND Y'S ACCCOUNT
IN THE BOOK OF X.

ANSWER:
CONSIGNMENT ACCOUNT
IN THE BOOKS OF MR . X
PARTICULARS AMOUNT PARTICULARS AMOUNT
RS.P. RS.P.

TO GOODS SENT ON CONSIGNMENT 50,000 BY Y A/C 64,000

TO BANK - EXPENSES ON CONSIGNMENT SALES (400*160)
FREIGHT AND CARTAGE 700

TO EXPENSES INCURRED BY 100cost of goods

TO Y BY CLOSING STOCK 10,440 1.4consignor exp
CLEARING CHARGES 1,500 (100*(100+4.4)) 3consignee exp
SELLING EXP 4,000
104.4
TO Y
NORMAL COMMISSION 25*400 10,000
ADDL COMM - 25% 1,000
TO PROFIT ON CONSIGNMENT 7,240

74,440 74,440

WORKING NOTE

T/O LESS COMMISSION 54,000

(64000-10000)
LESS : 125*400 50,000

ADDL COMMISSIOM 4,000

25/100*4000 1,000

TOTAL COMMISSION

NORMAL 10,000
ADDL 1,000
TOTAL COMMISSION 11,000
 IN THE BOOKS OF MR . X
Y A/C

TO BY CONSIGNMENT A/C
CONSIGNMENT SALES 64,000 CLEARING CHARGES 1,500
SELLING EXP 4,000

BY CONSIGNMENT - COMMISSION 11,000

BY BANK/CASH 47,700

64,000 64,000

P NO -4 TAXMAN PAG. NO: 236

GOODS SENT ON CONSIGNMENT 10000 UNITS COSTING RS.20/- ( INCLUDING TRANSPORTATION, ETC.) ARE IN CONSIGNMENT BUSINESS.
CONSIGNEE SOLD 8000 UNITS AND 1750 UNITS ARE IN STOCK. LOSS IS NORMAL LOSS.
VALUE STOCK IF (1) LOST UNIT HAS NO SCRAP VALUE OR (2) HAS A VALUE OF 5 PER UNIT.

P NO 4 ANSWER:
I)
NO OF UNITS 10000
COST P U 20
TOTAL COST 200000

NORMAL LOSS 10000-8000-1750

250 UNITS

COST PER UNIT 200000/9750

20.5128205128205

VALUE OF CLOSING STOCK 1750*20.5128

35897.4

II)
NO OF UNITS 10000
COST P U 20
TOTAL COST 200000

NORMAL LOSS 10000-8000-1750

250 UNITS

COST PER UNIT (200000-(5*250))/9750

20.3846153846154

VALUE OF CLOSING STOCK 1750*20.384

35672

P NO -5 TAXMAN PAG. NO: 236

GOODS SENT ON CONSIGNMENT 10,000 UNITS COSTING RS.50 EACH. ABNORMAL LOSS DUE TO ACCIDENT 1000 UNITS. GOODS SOLD BY THE CONSIGNEE
7000 UNITS VALUE ABNORMAL LOSS AND CLOSING SHOCK IF (1) SCRAP VALUE IS NIL OR (2) SCRAP VALUE IS RS.10 PER UNIT.

ANSWER:5

NO OF UNITS 10000
COST/OUTPUT 50
TOTAL COST 500000
ABNORMAL NORMAL LOSS 1000 UNITS
CLOSING STOCK 10000-7000-1000
2000 UNITS

ABNORMAL NORMAL LOSS 1000*50

50000

VALUE OF CLOSING STOCK 2000*50

100000
TOTAL COST 500000

VALUE OF CLOSING STOCK

2000 UNITS

COST PER UNIT (500000/10000)

50

VALUE OF CLOSING STOCK 2000*50

100000

ABNORMAL NORMAL LOSS 1000*50-1000*10

40000

P NO -6 TAXMAN PAG. NO: 236

GOODS SENT ON CONSIGNMENT 10,000 UNITS COSTING RS.50 EACH. ABNORMAL LOSS DUE TO ACCIDENT 600 UNITS 4% OF THE TOTAL UNITS IS
NORMAL LOSS. GOODS SOLD BY THE CONSIGNEE 7000 UNITS. VALUE ABNORMAL LOSS AND CLOSING STOCK IF (1) SCRAP VALUE IS NIL OR
(2) SCRAP VALUE IS RS.10 PER UNIT FOR ALL LOST UNITS.

NO OF UNITS 10000
COST/UNIT 50
TOTAL COST 500000
ABNORMAL NORMAL LOSS 600 UNITS
NORMAL LOSS 10000*4%
NORMAL LOSS 400
CLOSING STOCK 10000-7000-600-400
2000 UNITS

ABNORMAL NORMAL LOSS 600*52.08

31248

COST PER UNIT 500000/9600

52.0833333333333

VALUE OF CLOSING STOCK 2000*52.08

104160

TOTAL COST 500000

ABNORMAL NORMAL LOSS 600 UNITS

NORMAL LOSS 10000*4%
NORMAL LOSS 400
CLOSING STOCK 10000-7000-600-400
2000 UNITS

COST PER UNIT (500000-400*10)/9600

51.6666666666667

CLOSING STOCK 103340 103333.333333333

ABNORMAL NORMAL LOSS 600*51.67

31002

ABNORMAL NORMAL LOSS 31002-600*10

25002

P NO -8 TAXMAN PAG. NO: 236

DINESH OF KOLKATA CONSIGNED 100 TRANSISTOR SETS COSTING RS.500 EACH TO SURESH OF PATNA. THE INVOICE PROFORMA WAS MADE AT RS.600
PER SET. SURESH WAS ENTITLED TO A COMMISSION OF 7&1/2% ON SALES PLUS 2 & 1/2% DEL CREDERE COMMISSION AND 10% OF ANY EXCESS PRICE
REALISED OVER INVOICE PRICE. SURESH WAS TO BEAR ALL EXPENSES INCURRED AFTER THE GOODS REACHED HIS GODOWN. WHILE SENDING THE
GOODS, DINESH PAID RS.1,500 AS FORWARDING EXPENSES AND INSURANCE. IN TRANSIT,10 TRANSISTOR SETS WERE DAMAGED AND DINESH
RECOVERED RS.4,000 FROM THE INSURANCE COMPANY. SURESH TOOK DELIVERY OF REMAINING TRANSISTOR SETS PAYING RS.4,500 AS FREIGHT,
CARTAGE, ETC..SURESH SOLD 70 TRANSISTOR SETS AT RS.800 EACH, 30 OF THEM ON CREDIT. OUT OF WHICH THE PROCEEDS OF 3 TRANSISTOR SETS
COULD NOT BE RECOVERED BECAUSE OF THE DISAPPEARANCE OF THE CUSTOMERS’. HE PAID RS.500 AS STORAGE AND SELLING EXPENSES.
SURESH SENT A BANK DRAFT FOR THE AMOUNT DUE TO DINESH. SHOW THE CONSIGNMENT ACCOUNT AND SURESH'S ACCOUNT IN THE BOOKS OF DINESH.
ANSWER: 8

CONSIGNMENT ACCOUNT
IN THE BOOKS OF MR . DINESH
PARTICULARS AMOUNT PARTICULARS AMOUNT
RS.P. RS.P.

TO GOODS SENT ON CONSIGNMENT 60,000BY SURESH 56,000

TO BANK - EXPENSES ON CONSIGNMENT SALES (70*800)
FORWARDING EXP 1,500
BY STOCK RESERVE ON CONSIGNMENT 10,000
TO EXPENSES INCURRED BY BY BANK - INSURANCE CO 4,000
BY P & L A/C 1,150
TO SURESH BY CLOSING STOCK 13,300
FREIGHT AND CARTAGE 4,500(20*665)
STORAGE AND SELLING EXPENSES
(SURESH NEED TO BEAR ALL EXP AFTER
GOODS REACHED GODOWN)
TO Y
NORMAL COMMISSION 4,200
ADDL COMM - ((800-600)*70)*10% 1,400
DEL CREDERE COMMISSION 1,400
TO STOCK RESERVE 2,000
TO PROFIT ON CONSIGNMENT 9,450

84,450 84,450

WORKING NOTE

RECEIPT FROM INSURANCE & CO 4000 CLOSING STOCK UNITS

STOCK SENT ON CONSIGNMENT 100
COST 5000 STOCK LOST 10
10*500 STOCK SOLD 70
CONSIGNOR EXP 150 150 5150UNSOLD STOCK 20
LOSS -1150 STOCK VALUE AT INVOICE PRICE 665
CLOSING STOCK VALUE AT IP 13300

COST OF STOCK
UNITS PER UNIT
CONSIGNOR EXP 1500 100 15
2. CONSIGNEE EXP 4500 90 50
3. COST OF STOCK 60000 100 600

665

IN THE BOOKS OF MR . DINESH

SURESH A/C

TO BY CONSIGNMENT A/C
CONSIGNMENT SALES 56000STORAGE EXP
FRIEGHT 4500

BY COMMISSION 7000

BY BANK/CASH 44500

56000 56000

P NO - 7 TAXMAN PAG. NO: 236

FIND THE INVOICE VALUE OF GOODS SENT, VALUE OF CLOSING STOCK & STOCK RESERVE IN FOLLOWING CASES

(A) GOODS COSTING 300/-INVOICED TO CONSIGNEE AT 25% PROFIT ON COST. 5,000 UNITS WERE SENT OUT OF WHICH
4,000 UNITS WERE SOLD.
(B) GOODS COSTING 300/- INVOICED TO CONSIGNEE AT 25% PROFIT ON INVOICE PRICE SOLD. 5,000 UNITS
WERE SENT OUT OF WHICH 4,000 WERE SOLD.
(C) GOODS ARE INVOICED AT 600/- SO AS TO GIVE A PROFIT OF 20% ON INVOICE PRICE. 3,000 UNITS WERE SENT OUT OF
WHICH 20% ARE IN STOCK
(D) GOODS ARE INVOICED AT 600/- SO AS TO GIVE A PROFIT OF 20% ON COST. 3,000 UNITS WERE SENT OUT OF WHICH
20% ARE IN STOCK.
 ANSWER :7

GOODS SENT VALUE OF VALUE OF STOCK

COST INVOICE VALUE CLOSING STOCK CLOSING STOCK RESERVE
INV VALUE COST ON CL STOCK
375000 1500000 1875000 375000 300000 75000
1500000 2000000 400000 300000 100000
1800000 2160000 432000 360000 72000
1800000 2100000 420000 360000 60000
600 120
price of which was 20 100

P NO - 9 TAXMAN PAG. NO: 236

REEMA CONSIGNS GOODS TO SUNITA TO BE SOLD AT ABOVE INVOICE PRICE, SUNITA IS TO GET COMMISSION OF 5% ON
SALES AT INVOICE PRICE, PLUS 25% OF ANY SURPLUS PRICE REALIZED. REEMA RECEIVED FROM SUNITA AN ADVANCE
OF 75% OF THE INVOICE PRICE (AS SECURITY DEPOSIT),THE ACCOUNTS BEING SETTLED BY BANK DRAFTS IMMEDIATELY
ON SALES.DURING THE YEAR REEMA CONSIGNED TO SUNITA GOODS WORTH RS.3,60,000,THE INVOICE PRICE OF WHICH
WAS RS.5,00,000 THIS INCLUDES FREIGHT. SALES BY SUNITA DURING THE YEAR AMOUNTED TO ₹ 4,30,000.
GOODS UNSOLD ON 31.03.2011 WITH SUNITA WERE OF INVOICE PRICE OF RS.1,50,000 (COST INCLUDING FREIGHT RS.1,00,000).
REEMA HAD RECEIVED FROM SUNITA BY BANK DRAFT DURING THE YEAR RS.90,000, CERTAIN REMITTANCES BEING IN
TRANSIT ON 31.03.2011. SHOW THE CONSIGNMENT TO SUNITA A/C AND CONSIGNEE'S (SUNITA) A/C
IN THE BOOKS OF REEMA.

CONSIGNMENT ACCOUNT
IN THE BOOKS OF MR . REEMA
PARTICULARS AMOUNT PARTICULARS AMOUNT
RS.P. RS.P.

TO GOODS SENT ON CONSIGNMENT 500,000BY SUNITHA 430,000

TO BANK - EXPENSES ON CONSIGNMENT SALES
FORWARDING EXP
BY STOCK RESERVE ON CONSIGNMENT 140,000
TO EXPENSES INCURRED BY (500000-360000)
BY BANK - INSURANCE CO
TO SUNITHA BY CLOSING STOCK 150,000
FREIGHT AND CARTAGE
STORAGE AND SELLING EXPENSES

TO SUNITHA
NORMAL COMMISSION 17,500
ADDL COMM - 25% 20,000

TO STOCK RESERVE 50,000

TO PROFIT ON CONSIGNMENT 132,500

720,000 720,000

WORKING NOTE

COST 360,000
INV PRICE 500,000

CLOSING STOCK
COST 100,000
INV PRICE 150,000

GOODS SOLD
INV PRICE 350,000
GOODS SOLD AT 430,000
EXCESS PRICE 80,000

NORMAL COMM 17,500

ADDL COMM 20,000
TOTAL COMM 37,500
 IN THE BOOKS OF MR . REEMA
SUNITHA A/C

TO BY BANK A/C 262,500

CONSIGNMENT SALES 430,000ADVANCE FROM SUNITHA
0

BY COMMISSION 37,500

BY BANK/CASH 90,000
BY CASH IN TRANSIT 40,000
B/F
430,000 430,000

P NO - 10 TAXMAN PAG. NO: 236

X' OF DELHI PURCHASED 10,000 PIECES OF SAREES @ RS.100 PER SAREE. OUT OF THESE SAREES, 6000 WERE SENT
ON CONSIGNMENT TO 'Y' OF AGRA AT A SELLING PRICE OF RS.120 PER SAREE. THE CONSIGNOR PAID RS. 3000 FOR PACKING
AND FREIGHT. 'Y' SOLD 5000 SAREES AT 130/- PER SAREE AND INCURRED 1000/- FOR SELLING EXPENSES AND REMITTED
RS.5,00,000 TO DELHI ON ACCOUNT. THEY ARE ENTITLED TO A COMMISSION OF 5% ON TOTAL SALES PLUS A FURTHER 20%
COMMISSION ON ANY SURPLUS PRICE REALIZED OVER RS.125 PER SAREE RS.3000 SAREE WERE SOLD AT DELHI AT
RS.110 PER SAREE. PREPARE THE CONSIGNMENT ACCOUNT IN THE BOOKS OF 'X' AND THEIR ACCOUNT IN THE BOOKS OF
THE AGENT 'Y' OF AGRA.

CONSIGNMENT ACCOUNT
IN THE BOOKS OF MR . X
PARTICULARS AMOUNT PARTICULARS AMOUNT
RS.P. RS.P.

TO GOODS SENT ON CONSIGNMENT 720,000BY Y 650,000.0

TO BANK - EXPENSES ON CONSIGNMENT SALES
FORWARDING EXP
BY STOCK RESERVE ON CONSIGNMENT 120,000.0
TO EXPENSES INCURRED BY 3,000BY BANK - INSURANCE CO
CONSIGNOR BY P & L A/C
TO Y BY CLOSING STOCK 120,500.0
FREIGHT AND CARTAGE
STORAGE AND SELLING EXPENSES 1,000

TO Y
NORMAL COMMISSION 32,500
ADDL COMM - 20% 5,000

TO STOCK RESERVE 20,000

TO PROFIT ON CONSIGNMENT 109,000

890,500 890,500.0

IN THE BOOKS OF MR . Y
X A/C

TO BANK A/C 500,000BY CONSIGNMENT SALES 650,000

TO EXPENSES 1,000

TO COMMISSION 37,500

TO BANK/CASH 111,500

650,000 650,000

PROB.NO: 11 INSTITUTE.MAT
X OF DELHI PURCHASED 10,000 METRES OF CLOTH FOR RS.2,00,000 OF WHICH 5,000 METRES WERE SENT ON CONSIGNMENT TO Y OF
AGRA AT THE SELLING PRICE OF RS.30 PER METRE. X PAID RS.5,000 FOR FREIGHT AND RS.500 FOR PACKING ETC.
Y SOLD 4,000 METRE AT RS.40 PER METRE AND INCURRED RS.2,000 FOR SELLING EXPENSES. Y IS ENTITLED TO A COMMISSION OF 5%
ON TOTAL SALES PROCEEDS PLUS A FURTHER 20% ON ANY SURPLUS PRICE REALISED OVER RS.30 PER METRE. 3,000 METRES WERE
SOLD AT DELHI AT RS.30 PER METRE LESS RS.3,000 FOR EXPENSES AND COMMISSION. OWING TO FALL IN MARKET PRICE, THE
INVENTORIES OF CLOTH IN HAND IS TO BE REDUCED BY 10%. PREPARE THE CONSIGNMENT ACCOUNT AND TRADING AND PROFIT
& LOSS ACCOUNT IN BOOKS OF X.
ANSWER: 11

IN THE BOOKS OF MR. X CONSIGNMENT ACCOUNT

PARTICULARS AMOUNT PARTICULARS AMOUNT

TO GOODS SENT ON CONSIGNMENT ACCOUN 150,000BY Y’S ACCOUNT: (SALES) 160,000
TO BANK ACCOUNT: FREIGHT AND PACKING 5,500BY GOODS ON CONSIGNMENT 50,000
TO Y’S ACCOUNT: (CANCELLATION OF LOADING)
BY INVENTORIES ON 28,900
SELLING EXPENSES 2,000CONSIGNMENT(W.N.2)
COMMISSION (W.N.1) 16,000
TO INVENTORIES RESERVE (W.N.3) 10,000
TO PROFI‑T AND LOSS ACCOUNT (PFIR 55,490
ON CONSIGNMENT TRANSFERRED)
238,990 238,990

TRADING AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED……..
Particulars Amount Particulars Amount Amount
TO PURCHASES 200,000BY SALES 90,000
TO GROSS PROFIT 26,000BY GOODS SENT ON 100,000
CONSIGNMENT
BY INVENTORIES IN HAND COST 40,000
LESS: 10% 4,000 36,000
226,000 226,000

TO EXPENSES AND COMMISSION 3,000BY GROSS PROFIT B/D

TO NET PROFIT 78,490BY CONSIGNMENT A/C
(PROFIT ON CONSIGNMENT)
81,490 81,490

WORKING NOTES:
RS.
I. CALCULATION OF COMMISSION PAYABLE TO Y:
TOTAL SALE PROCEEDS OF Y 160,000
SURPLUS PROCEEDS REALISED OVER RS.30 PER METRE
[4,000 X RS.(40-30)] 40,000
COMMISSION:
5% OF TOTAL SALE PROCEEDS (5% OF RS.1,60,000) 8,000
20% OF SURPLUS (20% OF RS.40,000) 8,000
16000
II. INVENTORIES ON CONSIGNMENT:
COST OF CONSIGNMENT INVENTORIES (1000 MTRS @ ` 30) 30,000
ADD: EXPENSES OF CONSIGNOR (5,500X1/5) 1,100 18,990
31,100
LESS: REDUCTION OF 10% IN COST DUE TO FALL IN MARKET PRICE (20,000+1,100) X 10% 2,110
28990
III. LOADING ( RS.10 X 1,000 MTRS) 10,000

PROB. NO.12 PAG.NO: 6.67 INSTITUTE .MAT

MR.Y CONSIGNED 800 PACKETS OF TOOTHPASTE, EACH PACKET CONTAINING 100 TOOTHPASTES. COST PRICE OF EACH PACKET
WAS RS.900. MR. Y SPENT RS.100 PER PACKET AS CARTAGE, FREIGHT, INSURANCE AND FORWARDING CHARGES.ONE PACKET WAS
LOST ON THE WAY AND MR. Y LODGED CLAIM WITH THE INSURANCE COMPANY AND COULD GET RS.570 AS CLAIM ON AVERAGE BASIS.
CONSIGNEE TOOK DELIVERY OF THE REST OF THE PACKETS AND SPENT RS.39,950 AS OTHER NON-RECURRING EXPENSES AND
RS.22,500 AS RECURRING EXPENSES. HE SOLD 740 PACKETS AT THE RATE OF RS.12 PER TOOTHPASTE. HE WAS ENTITLED TO 2%
COMMISSION ON SALES PLUS 1% DEL-CREDERE COMMISSION. YOU ARE REQUIRED TO PREPARE CONSIGNMENT ACCOUNT.
CALCULATE THE COST OF INVENTORIES AT THE END, ABNORMAL LOSS AND PROFIT OR LOSS ON CONSIGNMENT.

ANSWER:

CONSIGNMENT ACCOUNT
TO GOODS SENT ON CONSIGNMENT A/C 720,000BY CONSIGNEE’S A/C-SALES 888,000
(800X ` 900) (740X100X `12)
TO CASH A/C 80,000

(EXPENSES 800X `100) BY ABNORMAL LOSS CASH A/C 570

TO CONSIGNEE’S A/C: (INSURANCE CLAIM)
RECURRING EXPENSES 22,500BY PROFIT AND LOSS ACCOUNT 430
NON-RECURRING EXPENSES 39,950(ABNORMAL LOSS)
BY CONSIGNMENT STOCK A/C 61,950
COMMISSION @ 2% ON RS. 8,88,000 17,760
DEL-CREDERE COMMISSION @ 1% ON 8,880
RS. 8,88,000

TO PROFI‑T AND LOSS A/ 61,860

(PFIR O‑T ON CONSIGNMENT)
950,950 950,950
 PROB. NO.13 PAG.NO: 6.67 INSTITUTE .MAT

D OF DELHI APPOINTED A OF AGRA AS ITS SELLING AGENT ON THE FOLLOWING TERMS: GOODS TO BE SOLD AT INVOICE
PRICE OR OVER. A TO BE ENTITLED TO A COMMISSION OF 7.5% ON THE INVOICE PRICE AND 20% OF ANY SURPLUS
PRICE REALIZED OVER INVOICE PRICE THE PRINCIPALS TO DRAW ON THE AGENT A 30 DAYS BILL FOR 80% OF THE
INVOICE PRICE.
ON 1ST FEBRUARY, 2020, 1,000 CYCLES WERE CONSIGNED TO A, EACH CYCLE COSTING RS.640 INCLUDING FREIGHT
AND INVOICED AT RS.800. BEFORE 31ST MARCH, 2020, (WHEN THE PRINCIPAL’S BOOKS ARE CLOSED) A MET HIS
ACCEPTANCE ON THE DUE DATE; SOLD O­820 CYCLES AT AN AVERAGE PRICE OF RS.930 PER CYCLE, THE SALE
EXPENSES BEING RS.12,500; AND REMITTED THE AMOUNT DUE BY MEANS OF BANK DRAFT. TWENTY OF THE
UNSOLD CYCLES WERE SHOP-SPOILED AND WERE TO BE VALUED AT A DEPRECIATION OF 50% OF COST. SHOW BY
MEANS OF LEDGER ACCOUNTS HOW THESE TRANSACTIONS WOULD BE RECORDED IN THE BOOKS OF A AND FIND OUT
THE VALUE OF CLOSING INVENTORY WITH A TO BE RECORDED IN THE BOOKS OF D AT COST.

D’S ACCOUNT 2020

2020 RS. 2020 RS.
FEB.1 TO BILLS PAYABLE A/C 640,000MAR.31 BY CASH/BANK A/C 762,600
(80% OF RS.8,00,000) (820X `930)
MAR.31 TO CASH A/C (EXPENSES) 12,500
TO COMMISSION EARNED A/C 70,520
TO BANK A/C 39,580
762,600 762,600

BILLS PAYABLE ACCOUNT

2020 RS. 2020 RS.
MAR. 4 TO CASH/BANK A/C 640,000FEB. 1 BY D’S A/C 640,000
640,000 640,000

VALUE OF CLOSING INVENTORY WITH A

160 CYCLES AT RS.640 (COST PRICE INCLUDING FREIGHT) 102,400

20 CYCLES (SHOP-SPOILED) AT 50% OF THE COST I.E. AT RS.320 EACH 6,400
VALUE OF CLOSING INVENTORY WITH A I.E. THE AMOUNT (NET EFFECT OF THE LOADING) AT WHICH D -----------------
WILL ACCOUNT FOR IN HIS BOOKS ON 31ST MARCH, 2020
108,800

WORKING NOTE: CALCULATION OF COMMISSION:

7.5 % ON THE INVOICE PRICE AMOUNT (820X RS.800) I.E., RS. 6,56,000 49,200
20% ON THE SURPLUS PRICE AMOUNT (820 X RS.130) RS. 1,06,600 21,320
70,520

ABNORMAL LOSS:
COST OF PACKET LOST DURING TRANSIT 900
ADD: EXPENSES INCURRED BY Y 100
GROSS ABNORMAL LOSS 1,000
LESS: INSURANCE CLAIM RECEIVED [570]
NET ABNORMAL LOSS 430

COST OF INVENTORIES AT THE END:

59 PACKETS @ RS.900 53,100
ADD: EXPENSES INCURRED BY Y (59X RS.100) 5,900
ADD: PROPORTIONATE (NON-RECURRING) EXPENSES INCURRED BY THE CONSIGNEE
(59/799X RS.39,950) 2,950
61,950

CLOSING INVENTORIES NO. OF PACKETS

PACKETS CONSIGNED 800
LESS: PACKET LOST IN TRANSIT [1]
799
LESS: PACKETS SOLD 740
59

PROB. NO.14 PAG.NO: 6.67 INSTITUTE .MAT

A OF AGRA SENT ON CONSIGNMENT GOODS VALUED RS.1,00,000 TO B OF MUMBAI ON 1ST MARCH, 2019. HE
INCURRED THE EXPENDITURE OF RS.12,000 ON FREIGHT AND INSURANCE. A’S ACCOUNTING YEAR CLOSES ON 31ST
DECEMBER. B WAS ENTITLED TO A COMMISSION OF 5% ON GROSS SALES PLUS A DEL-CREDERE COMMISSION OF 3%.
B TOOK DELIVERY OF THE CONSIGNMENT BY INCURRING EXPENSES OF RS.3,000 FOR GOODS CONSIGNED. ON
31.12.2019, B INFORMED ON PHONE THAT HE HAD SOLD ALL THE GOODS FOR RS.1,50,000 BY INCURRING SELLING
EXPENSES OF RS.2,000. HE FURTHER INFORMED THAT ONLY RS.1,48,000 HAD BEEN REALIZED AND REST WAS
CONSIDERED IRRECOVERABLE, AND WOULD BE SENDING THE CHEQUE IN A DAY OR SO FOR THE AMOUNT DUE
ALONG WITH THE ACCOUNTS SALE. ON 5.1.2020, A RECEIVED THE CHEQUE FOR THE AMOUNT DUE FROM B AND
INCURRED BANK CHARGES OF RS.260 FOR COLLECTING THE CHEQUE. THE AMOUNT WAS CREDITED BY THE BANK
ON 9.1.2020. WRITE UP THE CONSIGNMENT ACCOUNT ‑FINDING OUT THE PROFIT/LOSS ON THE CONSIGNMENT, B’S
ACCOUNT, PROVISION FOR EXPENSES ACCOUNT AND BANK ACCOUNT IN THE BOOKS OF THE CONSIGNOR,
RECORDING THE TRANSACTIONS UPTO THE RECEIPT AND COLLECTION OF THE CHEQUE.

ANSWER:14
IN THE BOOKS OF MR. A CONSIGNMENT TO MUMBAI ACCOUNT
2019 TO GOODS SENT ON CONSIGNMENT A/C 100,000 DEC. 31 BY B’S A/CS 150,000
MARCH
TO CASH A/C (FREIGHT AND INSURANCE) 12,000
TO B’S A/C: CLEARANCE EXPENSES 3,000
SELLING EXPENSES 2,000
COMMISSION
@ 5% ON RS.1,50,000 = 7,500
DEL-CREDERE COMMISSION @3% ON 12,000
RS.1,50,000 = 4,500
DEC. 31 TO PROVISION FOR EXPENSES 260
(BANK CHARGES)
TO PROFIT AND LOSS A/C 20,740
(PROFIT ON CONSIGNMENT)
150,000 150,000

B’S ACCOUNT 2019

2019 RS. 2019 RS. RS.
DEC. 31 TO CONSIGNMENT A/C 150,000 DEC. 31 BY CONSIGNMENT A/C
CLEARANCE EXPENSES 3,000
SELLING EXPENSES 2,000
COMMISSION 7,500
DEL-CREDERE COMMISSION 4,500 17,000
BY BALANCE C/D 133,000

150,000 150,000
2020 2020
JAN. 1 TO BALANCE B/D 133,000 JAN. 5 BY BANK A/C 133,000

BANK ACCOUNT 2020

JAN. 5 TO B’S ACCOUNT 133,000JAN. 5 BY BANK CHARGES 260
JAN. 5 BY BALANCE C/D 132,740
 133,000 133,000

PROVISION FOR EXPENSES ACCOUNT 2020

JAN. 5 TO BANK CHARGES 260JAN. 1 BY BALANCE B/D 260

260 260
P NO - 1 PAG.NO: 236 TAXMAN
KAY SENT 500 ARTICLES TO HIS AGENT JAY AT AN INVOICE PRICE OF RS.25 PER AR
JAY SOLD 400 ARTICLE @ RS.40 PER ARTICLE AND SENT AND ACCOUNT SALES , DE
SELLING EXPENSES. HE CHARGED 10% COMMISSION ON THE GROSS SALE PROCE
RECORD THE ABOVE MENTIONED TRANSACTIONS IN KAY'S LEDGER. SHOWING THE

IN THE BOOKS OF KAY

CONSIGNMENT A/C

TO GOODS SENT 12500

ON CONSIGNMENT
(500*25)

TO BANK A/C
FREIGHT AND CARTAGE 1000

TO JAY'S PERSONAL A/C

STORAGE CHARGE 200
SELLING EXPENSE 300 500

TO JAY'S PERSONAL A/C

NORMAL COMMISSION
(16000*10%) 1600
TO PROFIT ON CONSIGNME 3100

18700

WORKING NOTE

CLOSING STOCK - VALUVATION

UNITS AMOUNT
COST OF STOCK 500 12500
ADD : CONSIGNOR
EXPENSES 1000

TOTAL COST 13500

COST PER UNIT 27

CLOSING STOCK VALUE

(27*100) 2700
(500-400)
S NO 2
SHRI MEHTA OF BOMBAY CONSIGNS 1000 CASES OF GOODS COSTING RS.100/-EAC
SHRI MEHTA PAYS THE FOLLOWING EXPENSES IN CONNECTION WITH CONSIGNME
CHARGES 5000/- SRI SUNDARAM SELLS 700 CASES AT RS.140 PER CASE AND INCUR
THE FOLLOWING EXPENSES, CLEARING CHARGES 850/- STORAGE 1700/- PACKING
IT IS FOUND THAT 50 CASES HAVE BEEN LOST IN TRANIST AND 100 CASES ARE ST
SRI SUNDARAM IS ENTITLED TO A COMMISSION OF 10% ON GROSS SALES
DRAW UP THE CONSIGNMENT ACCOUNT AND SUNDARAM'S A/C IN THE BOOKS OF S

CONSIGNOR SRI MEHTA

CONSINEE SRI SUNDARAM

IN THE BOOKSOF SRI MEHTA

CONSIGNMENT A/C

TO GOODS SENT ON CONSIGMENT 100000

(1000*100)

TO BANK A/C
CARRIAGE , FRIEGHT 5000

TO SRI SUNDARAM PERSONAL A/C

CLEARING CHARGES 850
STORAGE CHARGES 1700
PACKING CHARGES & SELL 600 3150

TO SRI SUNDARAM PERSONAL A/C 9800

(98000*10%)
TO PROFIT ON CONSIGNMENT 11700

129650

WORKING NOTE

CLOSING STOCK VALUATION

UNITS
COST OF STOCK 1000
ADD : CONSIGNOR EXPENSES 1000

ADD : CONSIGNEE EXPENSES 850

CLOSING STOCK PER UNIT COST
TOTAL UNITS SENT 1000
LESS : STOCK LOST IN TRAN 50
LESS : STOCK IN TRANSIT 100
STOCK RREACHED CONSIG 850

GOODS SOLD 700

CLOSING STOCK 150 106

LYING WITH CONSIGNEE

STOCK IN TRANSIT 100 105

250

SRI SUNDARAM A/C

TO CONSIGNMENT A/C 98000 BY CONSIGNMENT A/C

(SALES) CLEARING CHARGES
STORAGE CHARGES
PACKING CHARGES & SELLING CHAR

BY CONSIGNMENT A/C
COMMISSION

BY CASH/BANK A/C

98000
S NO 3

GOODS SENT ON CONSIGNMENT 10000 UNITS COSTING RS.20/- ( INCLUDING TRANS

CONSIGNEE SOLD 8000 UNITS AND 1750 UNITS ARE IN STOCK. LOSS IS NORMAL LO
VALUE STOCK IF (1) LOST UNIT HAS NO SCRAP VALUE OR (2) HAS A VALUE OF 5 PER

TOTAL UNITS SENT 10000

GOODS REACHED
CONSIGNEE PREMISES 9750

LOST IN TRANSIT 250

(NORMAL LOSS)

COST PER UNIT =

(WHEN THERE IS A NORMAL LOSS)
=
 =

CLOSING STOCK =

CLOSING STOCK VALUE OF 1750 =

UNITS

WHEN THERE IS A SCRAP VALUE

TOTAL COST =
LESS : SCRAP VALUE =
REVISED TOTAL COST =

GOOD UNITS =

COST PER UNIT =

CLOSING STOCK =

=
S NO 4

GOODS SENT ON CONSIGNMENT 10,000 UNITS COSTING RS.50 EACH. ABNORMAL LO

7000 UNITS VALUE ABNORMAL LOSS AND CLOSING STOCK IF (1) SCRAP VALUE IS N

TOTAL UNITS SENT = 10000

CONSIGNEE RECD = 9000

(UNITS)

ABNORMAL LOSS = 1000

TOTAL COST = 10000*50

= 500000

ABNORMAL LOSS = 50000

TOTAL GOOD UNITS COST = 450000

CLOSING STOCK = 2000

= 100000
WHEN THERE IS A SCRAP VALUE OF RS 10

CLOSING STOCK = 2000

VALUE OF CLOSING STOCK = 100000

ABNORMAL LOSS = 1000*50

= 50000

= 50000-(10*1000)
ABNORMAL LOSS = 40000

PROB. NO.12 PAG.NO: 6.67 INSTITUTE .MAT

MR.Y CONSIGNED 800 PACKETS OF TOOTHPASTE, EACH PACKET CONTAINING 100 T
WAS RS.900. MR. Y SPENT RS.100 PER PACKET AS CARTAGE, FREIGHT, INSURANCE
LOST ON THE WAY AND MR. Y LODGED CLAIM WITH THE INSURANCE COMPANY AND
CONSIGNEE TOOK DELIVERY OF THE REST OF THE PACKETS AND SPENT RS.39,950
RS.22,500 AS RECURRING EXPENSES. HE SOLD 740 PACKETS AT THE RATE OF RS.1
COMMISSION ON SALES PLUS 1% DEL-CREDERE COMMISSION. YOU ARE REQUIRED
CALCULATE THE COST OF INVENTORIES AT THE END, ABNORMAL LOSS AND PROFI

TOTAL UNITS SENT 800 PACKETS

NO OF UNITS RECEIVED BY
THE CONSIGNEE 799 PACKETS

LOSS IN TRANSIT 1 PACKET

IN THE BOOKSOF MR Y

CONSIGNMENT A/C

TO GOODS SENT ON CONSIGNMENT 720000

(800*900)

TO BANK A/C
CARTAGE, FREIGHT AND INSURANCE
(800*100) 80000

TO CONSIGNEE PERSONAL A/C

NON RECURRING EXP 39950

RECURRING EXP 22500 62450
 TO CONSINEE PERSONAL A/C
NORMAL COMMISSION 17760
DEL CREDE COMMISSION 8880 26640

TO PROFIT ON CONSIGNMENT 61860

950950

CLOSING STOCK - VALUATION

TOTAL UNITS SENT 800 PACKETS

NO OF UNITS RECEIVED BY
THE CONSIGNEE 799 PACKETS

LOSS IN TRANSIT 1 PACKET

CLOSING STOCK LYING

WITH CONSIGNEE 59 (799-740)

UNITS RATE
COST OF STOCK 800 900

CONSIGNOR EXP 800 100

CONSIGNEE EXP 799 50

COST PER UNIT 59 1050

CLOSING STOCK

STOCK LOST 1 1000

ABNORMAL LOSS

INSURANCE CLAIM

ABNORMAL LOSS

S NO 6

PROB.NO: 11 INSTITUTE.MAT
X OF DELHI PURCHASED 10,000 METRES OF CLOTH FOR RS.2,00,000 OF WHICH 5,00
AGRA AT THE SELLING PRICE OF RS.30 PER METRE. X PAID RS.5,000 FOR FREIGHT
Y SOLD 4,000 METRE AT RS.40 PER METRE AND INCURRED RS.2,000 FOR SELLING E
ON TOTAL SALES PROCEEDS PLUS A FURTHER 20% ON ANY SURPLUS PRICE REAL
SOLD AT DELHI AT RS.30 PER METRE LESS RS.3,000 FOR EXPENSES AND COMMISS
INVENTORIES OF CLOTH IN HAND IS TO BE REDUCED BY 10%. PREPARE THE CONS
& LOSS ACCOUNT IN BOOKS OF X.

IN THE BOOKS OF
CONSIGNMENT

TO GOODS SENT ON CONSIGNMENT

5000*30

TO BANK A/C
FREIGHT CHARGES 5000
PACKING 500

TO Y'S PERSONAL A/C

SELLING EXPENSES

TO Y'S PERSONAL A/C

NORMAL COMMISSION 8000
(160000*5%)
ADDITIONAL COMMISSION 8000
(4000*(40-30))*20%

TO CONSIGNMENT STOCK - LOADING

TO PROFIT ON CONSIGNMENT

VALUATION OF CLOSING STOCK

COST OF STOCK

ADD : EXPENSES INCURRED BY THE CONSIGNOR

ADD : NON RECURRING EXPENSES - CONSIGNEE

CLOSING STOCK (5000-4000)

LESS : 10% REDUCTION IN CLOSING STOCK VALUE

NEED TO BE DONE

(1000*20+(1000*1.1)) = 1000*21.1

= 21100
CLOSING STOCK VALUE
LOADING (1000*10)

NET CLOSING STOCK VALUE AT COST

(21100-2110) 18990

TRADING AND PROFIT AND LOSS A/C

TO OPENING STOCK

TO PURCHASES 200000
(10000*20)
TO GROSS PROFIT 26000

226000

TO EXPENSES AND
COMMISSION 3000

TO NET PROFIT 78490

81490

S NO 7

PAG.NO: 6.67 INSTITUTE .MAT

D OF DELHI APPOINTED A OF AGRA AS ITS SELLING AGENT ON THE FOLLOWING TE

PRICE OR OVER. A TO BE ENTITLED TO A COMMISSION OF 7.5% ON THE INVOICE PR
PRICE REALIZED OVER INVOICE PRICE THE PRINCIPALS TO DRAW ON THE AGENT A
INVOICE PRICE.
ON 1ST FEBRUARY, 2020, 1,000 CYCLES WERE CONSIGNED TO A, EACH CYCLE COS
AND INVOICED AT RS.800. BEFORE 31ST MARCH, 2020, (WHEN THE PRINCIPAL’S BO
ACCEPTANCE ON THE DUE DATE; SOLD O­820 CYCLES AT AN AVERAGE PRICE OF R
EXPENSES BEING RS.12,500; AND REMITTED THE AMOUNT DUE BY MEANS OF BANK
UNSOLD CYCLES WERE SHOP-SPOILED AND WERE TO BE VALUED AT A DEPRECIAT
MEANS OF LEDGER ACCOUNTS HOW THESE TRANSACTIONS WOULD BE RECORDE
THE VALUE OF CLOSING INVENTORY WITH A TO BE RECORDED IN THE BOOKS OF D

IN THE BOOKS OF MR A ( CON

 D A/C ( CONSIGNOR A/C

TO BILLS PAYABLE

(1000*800*80%)

TO CASH/BANK A/C
SELLING EXPENSES

TO COMMISSION INCOME

TO BANK A/C

COMMISSION COMPUTATION

NORMAL COMMISSION 820*800

ADDL/OVERRIDING (930-800*820)*20%
COMMISSION
TOTAL COMMISSION INCOME

VALUE OF CLOSING STOCK TO BE RECORDED IN THE BOOKS OF D (AT COST)

CLOSING STOCK QTY UNITS

GOODS RECD ON CONSIGNMENT 1000

LESS : SALES 820
CLOSING STOCK 180

SHOP SPOILED 20
(TO BE VALUED AT 50%
DEPRECIATION)
BALANCE CYCLES 160
IN GOOD CONDITION

TOTAL VALUE OF CLOSING STOCK

BILLS PAYABLE A/C

 TO CASH/BANK A/C

S NO 8

REEMA CONSIGNS GOODS TO SUNITA TO BE SOLD AT ABOVE INVOICE PRICE, SUNI

SALES AT INVOICE PRICE, PLUS 25% OF ANY SURPLUS PRICE REALIZED. REEMA RE
OF 75% OF THE INVOICE PRICE (AS SECURITY DEPOSIT),THE ACCOUNTS BEING SET
ON SALES.DURING THE YEAR REEMA CONSIGNED TO SUNITA GOODS WORTH RS.3,
WAS RS.5,00,000 THIS INCLUDES FREIGHT. SALES BY SUNITA DURING THE YEAR AM
GOODS UNSOLD ON 31.03.2011 WITH SUNITA WERE OF INVOICE PRICE OF RS.1,50,0
REEMA HAD RECEIVED FROM SUNITA BY BANK DRAFT DURING THE YEAR RS.90,000
TRANSIT ON 31.03.2011. SHOW THE CONSIGNMENT TO SUNITA A/C AND CONSIGNEE

IN THE BOOKS OF CONSIGNOR

CONSIGNMENT A/C

TO GOODS SENT ON CONSIGNMENT 500000

TO SUNITA PERSONAL A/C 37500

TO STOCK RESERVE - CONSIGNMENT STOCK

(150000-100000) 50000

TO PROFIT ON CONSIGNMENT 132500

720000

CONSIGNEE - SUNITA A/C

TO CONSIGNMENT A/C 430000

(SALES)

430000
 COMMISSION COMPUTATION

INVOICE PRICE

GOODS SENT 500000

CLOSING STOCK 150000

GOODS SOLD 350000

SALES VALUE 430000

COMMISSION
@ INVOICE PRICE
5% 17500

(430000-350000) 20000

TOTAL 37500
COMMISSION
S NO 9

GOODS SENT ON CONSIGNMENT 10,000 UNITS COSTING RS.50 EACH. ABNORMAL LO

NORMAL LOSS. GOODS SOLD BY THE CONSIGNEE 7000 UNITS. VALUE ABNORMAL L
(2) SCRAP VALUE IS RS.10 PER UNIT FOR ALL LOST UNITS.

UNITS

GOODS SENT ON CONSIGNMENT 10000

LESS : ABNORMAL LOSS 600

9400

LESS : NORMAL LOSS 400

GOOD UNITS 9000

LESS : GOODS SOLD 7000

CLOSING STOCK 2000

TOTAL COST OF STOCK =

 COST OF STOCK (PER UNIT) =

ABNORMAL LOSS =

ABNORMAL LOSS =

VALUE OF CLOSING STOCK =

WHEN THERE IS A SCRAP VALUE OF RS 10

COST PER UNIT =

ABNORMAL LOSS =

CLOSING STOCK =

=
S NO 10

A OF AGRA SENT ON CONSIGNMENT GOODS VALUED RS.1,00,000 TO B OF

INCURRED THE EXPENDITURE OF RS.12,000 ON FREIGHT AND INSURANCE
DECEMBER. B WAS ENTITLED TO A COMMISSION OF 5% ON GROSS SALES
B TOOK DELIVERY OF THE CONSIGNMENT BY INCURRING EXPENSES OF R
31.12.2019, B INFORMED ON PHONE THAT HE HAD SOLD ALL THE GOODS F
EXPENSES OF RS.2,000. HE FURTHER INFORMED THAT ONLY RS.1,48,000 H
CONSIDERED IRRECOVERABLE, AND WOULD BE SENDING THE CHEQUE IN
ALONG WITH THE ACCOUNTS SALE. ON 5.1.2020, A RECEIVED THE CHEQU
INCURRED BANK CHARGES OF RS.260 FOR COLLECTING THE CHEQUE. TH
ON 9.1.2020. WRITE UP THE CONSIGNMENT ACCOUNT ‑FINDING OUT THE P
ACCOUNT, PROVISION FOR EXPENSES ACCOUNT AND BANK ACCOUNT IN
RECORDING THE TRANSACTIONS UPTO THE RECEIPT AND COLLECTION O
 IN THE BOOKS OF CONS
CONSIGNMENT

TO GOODS SENT ON CONSIGNMENT

TO BANK A/C

TO B'S PERSONAL A/C

DELIVERY EXPENSES

TO B'S PERSONAL A/C

SELLING EXPENSES

TO B'S PERSONAL A/C

NORMAL COMMISSION
150000*5%
DEL CREDERE COMMISSION
150000*3%

TO PROVISION FOR EXPENSES

TO PROFIT ON CONSIGNMENT

CONSIGNEE - B

DEC TO CONSIGNMENT A/C

2019 (SALES)

Jan-20 TO BALANCE B/D

 PROVISION FOR EXP

TO BALANCE C/D

Jan-20 TO BANK A/C

BANK A/C

Jan-20 TO B'S PERSONAL A/C

FIND THE INVOICE VALUE OF GOODS SENT, VALUE OF CLOSING STOCK & STOCK RE

(A) GOODS COSTING 300/-INVOICED TO CONSIGNEE AT 25% PROFIT ON COST. 5,000

4,000 UNITS WERE SOLD.
(B) GOODS COSTING 300/- INVOICED TO CONSIGNEE AT 25% PROFIT ON INVOICE PR
WERE SENT OUT OF WHICH 4,000 WERE SOLD.
(C) GOODS ARE INVOICED AT 600/- SO AS TO GIVE A PROFIT OF 20% ON INVOICE PR
WHICH 20% ARE IN STOCK
(D) GOODS ARE INVOICED AT 600/- SO AS TO GIVE A PROFIT OF 20% ON COST. 3,000
20% ARE IN STOCK.

ANSWER :7

GOODS SENT VALUE OF VALUE OF

COST INVOICE VALUE CLOSING STOCK CLOSING STOCK
COST
1 1500000 1875000 300000 375000

2 1500000 2000000 300000 400000

PROFIT 500000

3 1440000 1800000 288000 360000

4 1500000 1800000 300000 360000

1500000 100 25/100 1/4

? 25 1/5
 375000
1875000
RICE OF RS.25 PER ARTICLES AND PAID FREIGHT AND CARTAGE RS.1000/-
ACCOUNT SALES , DEDUCTING RS.200 FOR STORAGE CHARGES AND RS.300 FOR
GROSS SALE PROCEEDS AND REMITTED THE AMOUNT DUE TO KAY
EDGER. SHOWING THE PROFIT EARND BY THE CONSIGNOR.

OKS OF KAY COST PRICE

NMENT A/C MARK UP

BY CONSIGNEE PERSONAL A/C INVOICE PRICE

SALES
(400*40) 16000 SELLING PRICE

BY CONSIGNMENT STOCK A/C 2700

18700
COSTING RS.100/-EACH TO SHRI SUNDRAM OF MADRAS
ON WITH CONSIGNMENT,CARRIAGE,FREIGHT & LOADING
PER CASE AND INCURS
AGE 1700/- PACKING & SELLING EXPENSES 600.
ND 100 CASES ARE STILL IN TRANSIT.
ROSS SALES
C IN THE BOOKS OF SRI MEHTA.

OOKSOF SRI MEHTA

NSIGNMENT A/C

BY SRI SUNDARAM PERSONAL A/C

SALES 98000
(700*140)

BY CONSIGNMENT STOCK A/C

STOCK IN TRANSIT 10500

STOCK LYING WITH THE CO 15900 26400

BY STOCK LOST IN TRANSIT 5250

(50*105)

129650

AMOUNT COST PER UNIT

100000 100
5000 5
105
850 1
106
 15900

10500

/C

850
1700
RGES & SELLING CHARGES 600 3150

9800

85050

98000

/- ( INCLUDING TRANSPORTATION, ETC.) ARE IN CONSIGNMENT BUSINESS.

K. LOSS IS NORMAL LOSS.
HAS A VALUE OF 5 PER UNIT.

200000

TOTAL COST/ REMAINING GOOD UNITS

200000/9750
 20.51282

1750 UNITS

1750 * 20.51

35892.5

200000
1250
198750

9750

20.38462

1750*20.38

35665

0 EACH. ABNORMAL LOSS DUE TO ACCIDENT 1000 UNITS. GOODS SOLD BY THE CONSIGNEE
1) SCRAP VALUE IS NIL OR (2) SCRAP VALUE IS RS.10 PER UNIT.

(10000-1000-7000)
 UNITS

KET CONTAINING 100 TOOTHPASTES. COST PRICE OF EACH PACKET

FREIGHT, INSURANCE AND FORWARDING CHARGES.ONE PACKET WAS
RANCE COMPANY AND COULD GET RS.570 AS CLAIM ON AVERAGE BASIS.
AND SPENT RS.39,950 AS OTHER NON-RECURRING EXPENSES AND
AT THE RATE OF RS.12 PER TOOTHPASTE. HE WAS ENTITLED TO 2%
N. YOU ARE REQUIRED TO PREPARE CONSIGNMENT ACCOUNT.
MAL LOSS AND PROFIT OR LOSS ON CONSIGNMENT.

E BOOKSOF MR Y

NSIGNMENT A/C

BY CONSIGNEE PERSONAL A/C 888000

(740*12*100)

BY INSURANCE CLAIM 570

BY ABNORMAL LOSS 430

BY CONSIGNMENT STOCK 61950

 950950

AMOUNT
720000

80000

39950

61950

1000

570

430

00,000 OF WHICH 5,000 METRES WERE SENT ON CONSIGNMENT TO Y OF

S.5,000 FOR FREIGHT AND RS.500 FOR PACKING ETC.
.2,000 FOR SELLING EXPENSES. Y IS ENTITLED TO A COMMISSION OF 5%
 URPLUS PRICE REALISED OVER RS.30 PER METRE. 3,000 METRES WERE
ENSES AND COMMISSION. OWING TO FALL IN MARKET PRICE, THE
PREPARE THE CONSIGNMENT ACCOUNT AND TRADING AND PROFIT

IN THE BOOKS OF MR X
CONSIGNMENT A/C

150000 BY Y'S PERSONAL A/C 160000

(4000*40)

BY GOODS SENT ON CONSIGMENT - LOADING

STOCK RESERVE 50000
5500 (5000*10)

BY CONSIGNMENT STOCK A/C 28990

2000

16000

10000

55490
238990 238990

UNITS RATE AMOUNT

5000 30 150000

5000 1.1 5500

5000 31.1 155500

1000 31.1 31100

2110

28990
 10000

18990

LOSS A/C

BY SALES 90000
(3000*30)
BY GOODS SENT ON CONSIGNMENT
(5000*20) 100000

BY CLOSING STOC 40000

LESS : 10% REDUC 4000 36000
226000

BY GROSS PROFIT 26000

BY PROFIT ON CONSIGNME 55490

81490

N THE FOLLOWING TERMS: GOODS TO BE SOLD AT INVOICE

% ON THE INVOICE PRICE AND 20% OF ANY SURPLUS
RAW ON THE AGENT A 30 DAYS BILL FOR 80% OF THE

O A, EACH CYCLE COSTING RS.640 INCLUDING FREIGHT

THE PRINCIPAL’S BOOKS ARE CLOSED) A MET HIS
AVERAGE PRICE OF RS.930 PER CYCLE, THE SALE
E BY MEANS OF BANK DRAFT. TWENTY OF THE
UED AT A DEPRECIATION OF 50% OF COST. SHOW BY
WOULD BE RECORDED IN THE BOOKS OF A AND FIND OUT
D IN THE BOOKS OF D AT COST.

OOKS OF MR A ( CONSIGNEE)
A/C ( CONSIGNOR A/C)

640000 BY CASH/BANK A/C 762600

(SALE PROCEEDS)
(820*930)

12500

70520

39580

762600 762600

49200
21320

70520

OF D (AT COST)

RATE AMOUNT

320 6400

640 102400

108800

BILLS PAYABLE A/C

 640000 BY D A/C 640000

640000 640000

INVOICE PRICE, SUNITA IS TO GET COMMISSION OF 5% ON

REALIZED. REEMA RECEIVED FROM SUNITA AN ADVANCE
ACCOUNTS BEING SETTLED BY BANK DRAFTS IMMEDIATELY
GOODS WORTH RS.3,60,000,THE INVOICE PRICE OF WHICH
DURING THE YEAR AMOUNTED TO ₹ 4,30,000.
CE PRICE OF RS.1,50,000 (COST INCLUDING FREIGHT RS.1,00,000).
G THE YEAR RS.90,000, CERTAIN REMITTANCES BEING IN
A A/C AND CONSIGNEE'S (SUNITA) A/C

OOKS OF CONSIGNOR
NSIGNMENT A/C

BY SUNITA PERSONAL A/C 430000

BY STOCK RESERVE - GOODS SENT

ON CONSIGNMENT 140000
(500000-360000)

BY CONSIGNMENT STOCK A/C 150000

720000

GNEE - SUNITA A/C

BY BANK A/C 262500

BY CONSIGNMENT A/C 37500

BY BANK A/C 90000

BY CASH IN TRANSIT 40000

430000
 COST PRICE

360000

100000

260000

0 EACH. ABNORMAL LOSS DUE TO ACCIDENT 600 UNITS 4% OF THE TOTAL UNITS IS
. VALUE ABNORMAL LOSS AND CLOSING STOCK IF (1) SCRAP VALUE IS NIL OR

500000
 500000/9600

52.08333

600*52.0833

31249.98

2000*52.0833

104166.6

(10000*50-400*10)/9600

51.67

600*51.67-600*10

25002

2000*51.67

103340

D RS.1,00,000 TO B OF MUMBAI ON 1ST MARCH, 2019. HE

GHT AND INSURANCE. A’S ACCOUNTING YEAR CLOSES ON 31ST
5% ON GROSS SALES PLUS A DEL-CREDERE COMMISSION OF 3%.
RING EXPENSES OF RS.3,000 FOR GOODS CONSIGNED. ON
OLD ALL THE GOODS FOR RS.1,50,000 BY INCURRING SELLING
AT ONLY RS.1,48,000 HAD BEEN REALIZED AND REST WAS
NDING THE CHEQUE IN A DAY OR SO FOR THE AMOUNT DUE
ECEIVED THE CHEQUE FOR THE AMOUNT DUE FROM B AND
TING THE CHEQUE. THE AMOUNT WAS CREDITED BY THE BANK
T ‑FINDING OUT THE PROFIT/LOSS ON THE CONSIGNMENT, B’S
D BANK ACCOUNT IN THE BOOKS OF THE CONSIGNOR,
T AND COLLECTION OF THE CHEQUE.
THE BOOKS OF CONSIGNOR MR A
CONSIGNMENT A/C

100000 BY B'S PERSONAL A/C 150000

12000

3000

2000

7500

4500 12000

260

20740
150000 150000

CONSIGNEE - B A/C

150000 BY CONSIGNMENT A/C

DELIVERY EXPENSES 3000
SELLING EXPENSES 2000
COMMISSION 12000

BY BALANCE C/D 133000

150000 150000

133000 05.01.202 BY BANK A/C 133000

133000 133000
 PROVISION FOR EXPENSES

260 Dec-19 BY CONSIGNMENT A/C

BANK CHARGES 260

260 260

260 BY BALANCE B/D 260

260 260

BANK A/C

133000 BY BANK CHARGES 260

BY BALANCE C/D 132740

133000 133000

NG STOCK & STOCK RESERVE IN FOLLOWING CASES

ROFIT ON COST. 5,000 UNITS WERE SENT OUT OF WHICH

ROFIT ON INVOICE PRICE SOLD. 5,000 UNITS

F 20% ON INVOICE PRICE. 3,000 UNITS WERE SENT OUT OF

F 20% ON COST. 3,000 UNITS WERE SENT OUT OF WHICH

COST 100 SALES 100

STOCK PROFIT 25 25% ON I 25
RESERVE 25% ON COST

75000 IP/SP 125 COST 75

100000 25/100 1/4 25/75 1/3

25/125 1/5 25/100 1/4

72000

60000

375000
COST PRICE 100 100

MARK UP 20

NVOICE PRICE 120

SELLING PRICE 150

120
BANK A/C DR CONSIGNOR A/C DR COMMISSION RECD A/ CDR
TO CONSIGNOR A/C TO COMMISSION INCOME TO P&L A/C
DEBTORS A/C DR CONSIGNEE PERSONAL A/C
TO SALES A/C TO SALES A/C

SALES A/C DR SALES A/C

TO TRADING A/C TO CONSIGNMENT A/C

CONSIGNOR EXP A/C DR

TO BANK A/C

CONSIGNMENT A/C DR
TO CONSIGNOR EXP A/C

CLOSING STOCK A/C DR

TO CONSIGNMENT A/C
IN THE BOOKS OF CONSIGNORE IN THE BOOKS OF CONSIGNEE

SALES SALES

CONSIGNEE PERSONAL A/C DR BANK A/C DR

TO CONSIGNMENT A/C TO CONSIGNOR A/C

CONSIGNEE EXP CONSIGNMENT EXP

CONSIGNMENT A/C DR CONSIGNOR A/C DR

TO CONSINEE PERSONAL A/C TO BANK A/C

COMMISSION A/C

CONSIGNMENT A/C DR CONSIGNOR A/C DR

TO CONSINEE PERSONAL A/C TO COMMISSION RECD A/C