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151
account sales on December 2015, gave a remittance for 6 units sold after deducting selling
expenses of P800, delivery and installation of P1,200 and the appropriate commission and
advances.
Required: 1. Prepare an account sales.
2. Entries in the books of the consignor. Consignment profit is determined
separately.
3. Reclassifying entry(s) of consignor, if any.
B. Henry Inc. sells piano for Key Inc. on consignment basis. His ledger postings show among
others the following account:
Freight and Insurance
(10 pianos)
Delivery
Commission
Freight for 3 pianos returned
P21,000
Just before the year ended in 2015, Henry made only an 80% remittance of the total
amount due. Sales price is 100% above cost. Key paid P2,750 shipping cost for the
shipment.
Required:
1) Entries in the book of the consignee to record only a) remittance and b)
reclassification for reporting purposes.
2) All entries in the books of the consignor. Support with a table analyzing for cost of
total shipment, goods sold, goods returned, goods sold.
3) Give the proper presentation of the balances in the balance sheet of
a) consignee and b) consignor.
C. REFER TO PROBLEM B. Two more units were sold on January2016. Related expenses
needed were incurred by Henry and full remittance was made.
Question 1: How much will be remitted?
Question 2: How much is Keys consignment profit or loss?
Question 3: How much is inventoriable cost of Key?
D. Moran Appliances consigned on November 5 five electric fans costing P800 each to Dizon
Marketing Company, which was to sell them at any price above P1,000. The amount over
P1,000 will represent consignee's commission. Moran paid the trucking cost of P200 and
is to reimburse Dizon for local delivery to customers. During December, Dizon Marketing
sold three fans, two for cash at P1,500 each and one on credit at P1,800 of which it had
collected 50%. Dizon paid P170 for local delivery to customers. Full remittance is
required within a month from the time goods are sold.
Question 1: Assuming that Dizon Marketing made interim settlement as of December 15,
how much should it remit to Moran Appliances?
Question 2: How much is the profit to date of Moran Appliances resulting from the
consignment?
Question 3: How much is the profit to date of Dizon?
QUIZ-CONSIGNMENT
152
SOLUTION
1.C
2. A
3A
4A
5E
6D
7.D
8.B
9C
11. C
Prob A
PROBLEMS
1. Sales (6 x 12,000)
Less:
Selling
Installation
Commission
Balance
Less:
Advances
Due for remittance
Units on Hand
2,
Entries (Consignor)
a.
Consignment Out Argy
Merchandise Shipment on consignment
5,600
66,400
6,000
60,400
6
108,000
2,000
Cash
Advances from Consignee
3.
72,000
800
1,200
3,600
12,000
Cash
Advances
Consignment Out
Consignment Out T. Nippon
60,400
6,000
5,600
Consignment Out
Consignment Profit
11,400
Reclassifying entry:
Merchanise Inventory-Consignment
Deferred Consignment Expenses
Consignment Out (unsold including freight)
This should close the consignment out account.
Sales
Cost of Sales (72,000 x 75%)
Commission
Selling Expenses
Delivery & Installation
Freight (2,000 x 6/12)
Net Profit
Prob B
1. Balance of the consignment in represents amount for remittance
Remittance 80% of P9850= P7,880
Due to consignor 20%= P1,970
1) Consignment In -Key Inc.
Cash
54,000
1,000
P54,000
3,600
800
1,200
1,000
108,000
2,000
12,000
72,000
11,400
55,000
P72,000
60,600
P 11,400
P9,850
7,880
7,880
153
2) Consignment In
Due to Consignor
1,970
35,000
7,880
11,150
1,970
10,500
Consignment Loss
Consignment Out
Cost
Shipping Cost
Freight
Delivery
Commission
Freight
2,750
21,000
10,500
900
Total
35,000
2,750
3,500
300
6,300
1,050
48,900
Sales
Less charges for goods sold
Expenses for goods returned
Consignment Loss
4 Unsold
14,000
1,100
1,400
3 Returns
10,500
825
1,050
16,500
1,050
13,425
P18,975
2,925
900
3 Sold
10,500
825
1,050
300
6,300
18,975
P21,000
21,900
P 900
Reclassifying entry:
Reclassifying entry:
Merchanise Inventory-Consignment
Deferred Consignment Expenses
Consignment Out (unsold including freight)
14,000
2,500
16,500
P 1,970
154
35,000
2,750
Cash
Consignment Out Henry Inc.
Due from Consignee
Consignment Out Henry Inc.
Table
1,970
14,000
(200)
(4,200)
9,600
1,970
P11,570
P 1,970
14,000
2,500
2) Sales
Less:
COS (2 x 3,500)
Shipping Cost
Commission
Freight
Delivery Expense
Profit of Moran Appliance
3) Inventory- Consignment
Deferred Consignment Expenses
Consignment Out debit balance
D.
a)
b) Sales
Less:
c)
7,000
550
4,200
700
200
14,000
12,650
P 1,350
P7,000
1,250
P8,250
3,000
170
2,830
COS (3 x 800)
Trucking Cost (3/5 x 200)
Delivery Expense
Profit of Moran Appliance
2,400
120
170
4,800
3,000
1,800
3,000
2,690
P 310
Exercise 4
4.
a.
* 2,050,000
307,500
3,500
750
1,500
1,250
b.
Commission
Advertising
93,000
1,642,500
1,735,500
7,000
1,742,500
85%
P2,050,000
314,500
1,735,500
1,642,500
P 93,000
5 sets
155
750
1,500
1,250
1,642,500
Consignment Out Eternal Power Block
1,800,000 2,050,000
Consignment Sales
1,500
60,000
Ret. Merchandise
300,000
3,500
750
500
250
748,940
(150)
Total
1,800,000
5,500
60,000.00
183.33
1,250
750
1,500
307,500
3,500
2,120,000
1,250.00
d) Sales
Less:
c)
(63)
Sets Unsold
(82)
Sets Sold
756,000
2,310
50.00
630.00
________
61,483.33
_________
758,940.00
1,299,576.67
1,483.33
984,000
3,006.67
750.00
820.00
307,500
3,500.00
1,299,576.67
2,050,000.00
1,301,060.00
748,940.00
156
(5)
Sets Ret.
5,750
1,025,000
1,025,000
932,000
1,250
1,642,500
5,750
2,050,000
932,000
1,250
1,642,500
Books of Consignor
Consignment Out Eternal Power Block
Merchandise shipment on consignment
Consignment Out Eternal Power Block
Cash
Cash
Due from Consignee
Consignment Out Eternal
Consignment Out Eternal
Merchandise Shipment on Consignment
Consignment Out Eternal
Consignment Out
Consignment Profit or Loss
1,800,000
5,500
1,642,500
93,000
314,500
60,000
748,940
1,800,000
5,500
2,050,000
60,000
748,940
157