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M.coal and co. consigned to m. sales ltd 2000 tons of coal . the coast of coal and railway freight were rs.7.50 and rs. 2 per ton respectively . an account sales was received from m. sales ltd . showing that 1000 tons sold @16 per ton sales expenses rs. 880, insurance rs. 120, brokerage rs. 1.25% and commission 2.5% . the consignee enclosed a bill for proceed less expense and reported a normal shortage of 40 tons on the whole consignment . show consignment account in the books of M. coal. co.?
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M.coal and co. consigned to m. sales ltd 2000 tons of coal . the coast...
Consignment Account in the Books of M. Coal Co.

Details:

- 2000 tons of coal consigned to M. Sales Ltd
- Cost of coal: Rs.7.50 per ton
- Railway freight: Rs.2 per ton
- 1000 tons sold @ Rs.16 per ton
- Sales expenses: Rs.880
- Insurance: Rs.120
- Brokerage: 1.25%
- Commission: 2.5%
- Normal shortage: 40 tons

Step 1: Calculate the cost of consignment

Total cost of consignment = Cost of coal + Railway freight
= (2000 x Rs.7.50) + (2000 x Rs.2) = Rs.17,000

Step 2: Record the consignment sent

M. Coal Co. will record the consignment sent to M. Sales Ltd as follows:

Consignment Sent A/c Dr. 17,000
To Coal A/c 15,000
To Railway Freight A/c 2,000

Step 3: Record the sale of consignment

M. Sales Ltd will record the sale of consignment as follows:

Bank A/c Dr. 16,000
To Sales A/c 16,000

Step 4: Calculate the expenses incurred by M. Sales Ltd

Expenses incurred by M. Sales Ltd = Sales expenses + Insurance + Brokerage + Commission
= Rs.880 + Rs.120 + (1.25% of Rs.16,000) + (2.5% of Rs.16,000)
= Rs.880 + Rs.120 + Rs.200 + Rs.400
= Rs.1,600

Step 5: Calculate the proceeds received by M. Coal Co.

Proceeds received by M. Coal Co. = Sales - Expenses
= Rs.16,000 - Rs.1,600
= Rs.14,400

Step 6: Record the receipt of proceeds

M. Coal Co. will record the receipt of proceeds from M. Sales Ltd as follows:

Bank A/c Dr. 14,400
To Consignment A/c 14,400

Step 7: Record the normal shortage

M. Coal Co. will record the normal shortage of 40 tons as follows:

Shortage A/c Dr. 300
To Consignment A/c 300

Step 8: Prepare the consignment account

Consignment Account
Particulars Amount (Rs.) Particulars Amount (Rs.)
To Coal A/c 15,000 By Bank A/c (Sales) 16,000
To Railway Freight A/c 2,000 By Shortage A/c 300
To Expenses A/c 1,600
To Balance c/d 100
17,600 17,600

Note: The balance c/d of Rs.100 represents the profit earned by M. Coal Co. on the consignment.

Conclusion:

In conclusion, the consignment account helps M. Coal Co. to keep track of the consignment sent to M. Sales Ltd and the proceeds received from the sale of the consignment. It also helps to calculate the expenses incurred by M. Sales Ltd and the normal shortage of the consignment.
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M.coal and co. consigned to m. sales ltd 2000 tons of coal . the coast of coal and railway freight were rs.7.50 and rs. 2 per ton respectively . an account sales was received from m. sales ltd . showing that 1000 tons sold @16 per ton sales expenses rs. 880, insurance rs. 120, brokerage rs. 1.25% and commission 2.5% . the consignee enclosed a bill for proceed less expense and reported a normal shortage of 40 tons on the whole consignment . show consignment account in the books of M. coal. co.?
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M.coal and co. consigned to m. sales ltd 2000 tons of coal . the coast of coal and railway freight were rs.7.50 and rs. 2 per ton respectively . an account sales was received from m. sales ltd . showing that 1000 tons sold @16 per ton sales expenses rs. 880, insurance rs. 120, brokerage rs. 1.25% and commission 2.5% . the consignee enclosed a bill for proceed less expense and reported a normal shortage of 40 tons on the whole consignment . show consignment account in the books of M. coal. co.? 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 M.coal and co. consigned to m. sales ltd 2000 tons of coal . the coast of coal and railway freight were rs.7.50 and rs. 2 per ton respectively . an account sales was received from m. sales ltd . showing that 1000 tons sold @16 per ton sales expenses rs. 880, insurance rs. 120, brokerage rs. 1.25% and commission 2.5% . the consignee enclosed a bill for proceed less expense and reported a normal shortage of 40 tons on the whole consignment . show consignment account in the books of M. coal. co.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for M.coal and co. consigned to m. sales ltd 2000 tons of coal . the coast of coal and railway freight were rs.7.50 and rs. 2 per ton respectively . an account sales was received from m. sales ltd . showing that 1000 tons sold @16 per ton sales expenses rs. 880, insurance rs. 120, brokerage rs. 1.25% and commission 2.5% . the consignee enclosed a bill for proceed less expense and reported a normal shortage of 40 tons on the whole consignment . show consignment account in the books of M. coal. co.?.
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