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Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each
invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs.
3,100.
On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000
each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of
the three cases remaining in stock, two cases were badly damaged due to bad packing and that they
would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission.
Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs.
6,000. Amount of all other sales were duly received.
On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque.
Prepare the ledger accounts in the books of Pawan.
?
Most Upvoted Answer
Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 ...
Ledger Accounts in the Books of Pawan:
1. Consignment Account
- To Sales Account
- To Expenses Account
- To Raman's Commission Account
- To Bad Debts Account (if any)
- To Cash/Bank Account (for amount received)
2. Raman's Account
- To Commission Account
- To Cash/Bank Account (for amount paid)
Explanation:
Consignment refers to a business arrangement where one party (consignor) sends goods to another party (consignee) for sale on its behalf. The consignor retains ownership of the goods until they are sold to a third party. The consignee acts as an agent and earns a commission on sales.
In this case, Pawan sent 10 cases of tea to Raman on consignment basis. The cost of each case was Rs. 5,000 but they were invoiced at Rs. 6,000 each. The total cost of goods sent was Rs. 50,000. In addition, there were expenses such as freight and other charges amounting to Rs. 3,100. Pawan would record these transactions in the Consignment Account as follows:
- Debit Consignment Account with Rs. 53,100 (cost of goods + expenses)
- Credit Cash/Bank Account with Rs. 53,100 (amount received)
When Raman sells the tea, he will send an Account Sales to Pawan showing the details of sales. Pawan will record the sales in the Consignment Account as follows:
- Credit Consignment Account with Rs. 67,000 (4 cases sold at Rs. 6,000 each and 3 cases sold at Rs. 7,000 each)
- Debit Sales Account with Rs. 67,000 (amount of sales)
Raman is entitled to a commission of 5% on gross sales, which includes del credere commission. Del credere commission is an additional commission paid to the consignee for assuming the credit risk of the buyers. Pawan will record the commission as follows:
- Debit Raman's Commission Account with Rs. 3,350 (5% of Rs. 67,000)
- Credit Consignment Account with Rs. 3,350 (commission payable to Raman)
Raman can recover only Rs. 4,000 from a customer who bought one case on credit. The remaining amount is a bad debt that Pawan should write off. Pawan will record the bad debt in the Consignment Account as follows:
- Debit Bad Debts Account with Rs. 2,000 (Rs. 6,000 - Rs. 4,000)
- Credit Sales Account with Rs. 2,000 (amount of bad debt)
When Raman pays the amount due to Pawan, Pawan will record it in the Cash/Bank Account and credit Raman's Account with the same amount.
1. Consignment Account
- To Sales Account
- To Expenses Account
- To Raman's Commission Account
- To Bad Debts Account (if any)
- To Cash/Bank Account (for amount received)
2. Raman's Account
- To Commission Account
- To Cash/Bank Account (for amount paid)
Explanation:
Consignment refers to a business arrangement where one party (consignor) sends goods to another party (consignee) for sale on its behalf. The consignor retains ownership of the goods until they are sold to a third party. The consignee acts as an agent and earns a commission on sales.
In this case, Pawan sent 10 cases of tea to Raman on consignment basis. The cost of each case was Rs. 5,000 but they were invoiced at Rs. 6,000 each. The total cost of goods sent was Rs. 50,000. In addition, there were expenses such as freight and other charges amounting to Rs. 3,100. Pawan would record these transactions in the Consignment Account as follows:
- Debit Consignment Account with Rs. 53,100 (cost of goods + expenses)
- Credit Cash/Bank Account with Rs. 53,100 (amount received)
When Raman sells the tea, he will send an Account Sales to Pawan showing the details of sales. Pawan will record the sales in the Consignment Account as follows:
- Credit Consignment Account with Rs. 67,000 (4 cases sold at Rs. 6,000 each and 3 cases sold at Rs. 7,000 each)
- Debit Sales Account with Rs. 67,000 (amount of sales)
Raman is entitled to a commission of 5% on gross sales, which includes del credere commission. Del credere commission is an additional commission paid to the consignee for assuming the credit risk of the buyers. Pawan will record the commission as follows:
- Debit Raman's Commission Account with Rs. 3,350 (5% of Rs. 67,000)
- Credit Consignment Account with Rs. 3,350 (commission payable to Raman)
Raman can recover only Rs. 4,000 from a customer who bought one case on credit. The remaining amount is a bad debt that Pawan should write off. Pawan will record the bad debt in the Consignment Account as follows:
- Debit Bad Debts Account with Rs. 2,000 (Rs. 6,000 - Rs. 4,000)
- Credit Sales Account with Rs. 2,000 (amount of bad debt)
When Raman pays the amount due to Pawan, Pawan will record it in the Cash/Bank Account and credit Raman's Account with the same amount.
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Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 ...
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Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each
invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs.
3,100.
On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000
each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of
the three cases remaining in stock, two cases were badly damaged due to bad packing and that they
would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission.
Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs.
6,000. Amount of all other sales were duly received.
On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque.
Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)?
Question Description
Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs. 3,100. On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000 each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of the three cases remaining in stock, two cases were badly damaged due to bad packing and that they would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission. Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs. 6,000. Amount of all other sales were duly received. On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque. Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs. 3,100. On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000 each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of the three cases remaining in stock, two cases were badly damaged due to bad packing and that they would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission. Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs. 6,000. Amount of all other sales were duly received. On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque. Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs. 3,100. On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000 each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of the three cases remaining in stock, two cases were badly damaged due to bad packing and that they would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission. Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs. 6,000. Amount of all other sales were duly received. On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque. Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)?.
Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs. 3,100. On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000 each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of the three cases remaining in stock, two cases were badly damaged due to bad packing and that they would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission. Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs. 6,000. Amount of all other sales were duly received. On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque. Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs. 3,100. On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000 each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of the three cases remaining in stock, two cases were badly damaged due to bad packing and that they would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission. Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs. 6,000. Amount of all other sales were duly received. On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque. Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs. 3,100. On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000 each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of the three cases remaining in stock, two cases were badly damaged due to bad packing and that they would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission. Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs. 6,000. Amount of all other sales were duly received. On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque. Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)?.
Solutions for Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each
invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs.
3,100.
On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000
each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of
the three cases remaining in stock, two cases were badly damaged due to bad packing and that they
would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission.
Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs.
6,000. Amount of all other sales were duly received.
On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque.
Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each
invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs.
3,100.
On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000
each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of
the three cases remaining in stock, two cases were badly damaged due to bad packing and that they
would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission.
Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs.
6,000. Amount of all other sales were duly received.
On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque.
Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)? defined & explained in the simplest way possible. Besides giving the explanation of
Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each
invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs.
3,100.
On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000
each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of
the three cases remaining in stock, two cases were badly damaged due to bad packing and that they
would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission.
Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs.
6,000. Amount of all other sales were duly received.
On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque.
Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)?, a detailed solution for Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each
invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs.
3,100.
On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000
each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of
the three cases remaining in stock, two cases were badly damaged due to bad packing and that they
would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission.
Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs.
6,000. Amount of all other sales were duly received.
On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque.
Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)? has been provided alongside types of Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each
invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs.
3,100.
On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000
each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of
the three cases remaining in stock, two cases were badly damaged due to bad packing and that they
would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission.
Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs.
6,000. Amount of all other sales were duly received.
On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque.
Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)? theory, EduRev gives you an
ample number of questions to practice Pawan sent on consignment to Raman, 10 cases of tea costing Rs. 5,000 each
invoiced proforma at Rs. 6000 each. Freight and other charges on the consignment amounted to Rs.
3,100.
On 31st March, 1996, Raman sent an accounts sales showing that 4 cases had been sold at Rs. 6,000
each and 3 cases at Rs. 7,000 each while 3 cases remained unsold. Raman also informed Pawan that of
the three cases remaining in stock, two cases were badly damaged due to bad packing and that they
would be sold at Rs. 3,000 per caseRaman was entitled to a commission of 5% on gross sales which included del credere commission.
Raman could recover Rs. 4,000 only from a customer to whom one case had been sold on credit for Rs.
6,000. Amount of all other sales were duly received.
On 31st March, 1999, Raman paid the amount due to Pawan by means of a cheque.
Prepare the ledger accounts in the books of Pawan. Related: ICAI Notes 7.2 - Consignment Accounting (Part - 1)? tests, examples and also practice CA Foundation tests.
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