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on 1jan 2018 b of Mumbai consigned 100 case (cost price 7500)at a proforma invoice of 25%profit on sale to his agent C of Chandigarh . on the same date b paid 600 as expenses.on 30th January ,c took delivery and paid 1200 for octroi and other duties and remitted 4000 as an advance . on 31st January he sold 80 cases for 10500 c is entitled to 5%commission on gross sales price in excess of invoice price.show cosignment a/c and C's account in the book of B.C is required to maintain proportion security with the consignor for unsold stock.
? Related: Consignment Accounting
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on 1jan 2018 b of Mumbai consigned 100 case (cost price 7500)at a prof...
Consignment Accounting
Consignment accounting is a method of accounting where goods are sent by the owner (consignor) to another person (consignee) for the purpose of selling them on behalf of the owner. The consignee acts as an agent for the consignor and is responsible for selling the goods and remitting the proceeds to the consignor, less any expenses and commissions.
Consignment Account in the Book of B
The consignment account in the book of B is used to record the transactions related to the consignment. The following entries are recorded in the consignment account:
1. On 1st January:
Goods sent on consignment (100 cases at cost price of 7500 each) = 750000
Expenses paid by B = 600
Total amount debited = 750600
2. On 30th January:
Advance received from C = 4000
Total amount credited = 4000
3. On 31st January:
Commission payable to C (5% on sales price in excess of invoice price) = 375
Goods unsold (20 cases at cost price of 7500 each) = 150000
Total amount credited = 150375
C's Account in the Book of B
C's account in the book of B is used to record the transactions related to the consignment between B and C. The following entries are recorded in C's account:
1. On 30th January:
Advance paid by C = 4000
Total amount debited = 4000
2. On 31st January:
Commission earned by C (5% on sales price in excess of invoice price) = 525
Expenses incurred by C (1200 for octroi and other duties) = 1200
Amount payable to B (sales price of 80 cases at 10500 each) = 840000
Total amount credited = 841725
Proportion Security
Proportion security is the amount of money that the consignee (C) is required to maintain with the consignor (B) for the unsold stock. The proportion security is calculated as a percentage of the cost price of the goods sent on consignment.
In this case, the proportion security is 20% of the cost price of 100 cases, which is 150000. Therefore, C is required to maintain a proportion security of 150000 with B for the unsold stock.
Consignment accounting is a method of accounting where goods are sent by the owner (consignor) to another person (consignee) for the purpose of selling them on behalf of the owner. The consignee acts as an agent for the consignor and is responsible for selling the goods and remitting the proceeds to the consignor, less any expenses and commissions.
Consignment Account in the Book of B
The consignment account in the book of B is used to record the transactions related to the consignment. The following entries are recorded in the consignment account:
1. On 1st January:
Goods sent on consignment (100 cases at cost price of 7500 each) = 750000
Expenses paid by B = 600
Total amount debited = 750600
2. On 30th January:
Advance received from C = 4000
Total amount credited = 4000
3. On 31st January:
Commission payable to C (5% on sales price in excess of invoice price) = 375
Goods unsold (20 cases at cost price of 7500 each) = 150000
Total amount credited = 150375
C's Account in the Book of B
C's account in the book of B is used to record the transactions related to the consignment between B and C. The following entries are recorded in C's account:
1. On 30th January:
Advance paid by C = 4000
Total amount debited = 4000
2. On 31st January:
Commission earned by C (5% on sales price in excess of invoice price) = 525
Expenses incurred by C (1200 for octroi and other duties) = 1200
Amount payable to B (sales price of 80 cases at 10500 each) = 840000
Total amount credited = 841725
Proportion Security
Proportion security is the amount of money that the consignee (C) is required to maintain with the consignor (B) for the unsold stock. The proportion security is calculated as a percentage of the cost price of the goods sent on consignment.
In this case, the proportion security is 20% of the cost price of 100 cases, which is 150000. Therefore, C is required to maintain a proportion security of 150000 with B for the unsold stock.
Community Answer
on 1jan 2018 b of Mumbai consigned 100 case (cost price 7500)at a prof...
Anant Co. of Pune consigned 500 toys to Ramesh of Kolhapur. A pro-forma invoice was prepared at Rs. 40/- per toy, the cost of which was Rs. 35/- per toy. Anant Co spent Rs. 750- by way of forwarding charges including insurance premium of Rs. 150 In transit 50 toys were destroyed and Ramesh received 90 % of the cost price in full satisfaction of the claim with Insurance Company. Ramesh sold the remaining toys at invoice price. Ramesh spent only Rs. 300/- for expenses. He deducted commission at 2% on sales and paid the balance to Anant Company of Pune.
Prepare the Consignment Account and Ramesh's Account in the books of Anant & Company, Pune.
Prepare the Consignment Account and Ramesh's Account in the books of Anant & Company, Pune.
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on 1jan 2018 b of Mumbai consigned 100 case (cost price 7500)at a proforma invoice of 25%profit on sale to his agent C of Chandigarh . on the same date b paid 600 as expenses.on 30th January ,c took delivery and paid 1200 for octroi and other duties and remitted 4000 as an advance . on 31st January he sold 80 cases for 10500 c is entitled to 5%commission on gross sales price in excess of invoice price.show cosignment a/c and C's account in the book of B.C is required to maintain proportion security with the consignor for unsold stock. Related: Consignment Accounting?
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on 1jan 2018 b of Mumbai consigned 100 case (cost price 7500)at a proforma invoice of 25%profit on sale to his agent C of Chandigarh . on the same date b paid 600 as expenses.on 30th January ,c took delivery and paid 1200 for octroi and other duties and remitted 4000 as an advance . on 31st January he sold 80 cases for 10500 c is entitled to 5%commission on gross sales price in excess of invoice price.show cosignment a/c and C's account in the book of B.C is required to maintain proportion security with the consignor for unsold stock. Related: Consignment Accounting? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about on 1jan 2018 b of Mumbai consigned 100 case (cost price 7500)at a proforma invoice of 25%profit on sale to his agent C of Chandigarh . on the same date b paid 600 as expenses.on 30th January ,c took delivery and paid 1200 for octroi and other duties and remitted 4000 as an advance . on 31st January he sold 80 cases for 10500 c is entitled to 5%commission on gross sales price in excess of invoice price.show cosignment a/c and C's account in the book of B.C is required to maintain proportion security with the consignor for unsold stock. Related: Consignment Accounting? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for on 1jan 2018 b of Mumbai consigned 100 case (cost price 7500)at a proforma invoice of 25%profit on sale to his agent C of Chandigarh . on the same date b paid 600 as expenses.on 30th January ,c took delivery and paid 1200 for octroi and other duties and remitted 4000 as an advance . on 31st January he sold 80 cases for 10500 c is entitled to 5%commission on gross sales price in excess of invoice price.show cosignment a/c and C's account in the book of B.C is required to maintain proportion security with the consignor for unsold stock. Related: Consignment Accounting?.
on 1jan 2018 b of Mumbai consigned 100 case (cost price 7500)at a proforma invoice of 25%profit on sale to his agent C of Chandigarh . on the same date b paid 600 as expenses.on 30th January ,c took delivery and paid 1200 for octroi and other duties and remitted 4000 as an advance . on 31st January he sold 80 cases for 10500 c is entitled to 5%commission on gross sales price in excess of invoice price.show cosignment a/c and C's account in the book of B.C is required to maintain proportion security with the consignor for unsold stock. Related: Consignment Accounting? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about on 1jan 2018 b of Mumbai consigned 100 case (cost price 7500)at a proforma invoice of 25%profit on sale to his agent C of Chandigarh . on the same date b paid 600 as expenses.on 30th January ,c took delivery and paid 1200 for octroi and other duties and remitted 4000 as an advance . on 31st January he sold 80 cases for 10500 c is entitled to 5%commission on gross sales price in excess of invoice price.show cosignment a/c and C's account in the book of B.C is required to maintain proportion security with the consignor for unsold stock. Related: Consignment Accounting? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for on 1jan 2018 b of Mumbai consigned 100 case (cost price 7500)at a proforma invoice of 25%profit on sale to his agent C of Chandigarh . on the same date b paid 600 as expenses.on 30th January ,c took delivery and paid 1200 for octroi and other duties and remitted 4000 as an advance . on 31st January he sold 80 cases for 10500 c is entitled to 5%commission on gross sales price in excess of invoice price.show cosignment a/c and C's account in the book of B.C is required to maintain proportion security with the consignor for unsold stock. Related: Consignment Accounting?.
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