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Sales include goods worth Rs. 1,50,000 sent to a customer on approval and remaining unsold on 31.3.2013. The cost of the goods was Rs. 1, 00, 000 .?
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Most Upvoted Answer
Sales include goods worth Rs. 1,50,000 sent to a customer on approval ...
Explanation:

  • In this transaction, goods worth Rs. 1,50,000 were sent to a customer on approval. This means that the customer has the option to either purchase the goods or return them.

  • As of 31.3.2013, the goods remain unsold, which implies that the customer has not yet made a decision on whether to purchase them or not.

  • The cost of the goods sent on approval was Rs. 1,00,000. This cost includes the expenses incurred in producing and delivering the goods to the customer.

  • Since the goods remain unsold, they are still considered as inventory as of 31.3.2013.

  • The value of the unsold inventory at the end of the accounting period is Rs. 1,50,000. This value is recorded as an asset on the balance sheet.

  • The cost of the unsold inventory is Rs. 1,00,000. This cost is recorded as an expense on the income statement under the Cost of Goods Sold (COGS) account.

  • It is important to note that if the customer decides to purchase the goods at a later date, the value of the inventory will be removed from the balance sheet and recorded as revenue on the income statement.

Community Answer
Sales include goods worth Rs. 1,50,000 sent to a customer on approval ...
To account for sales on approval, you wouldn't recognize revenue until the customer decides to keep the goods. So, on March 31, 2013, you would not record the Rs.1,50,000 as sales revenue but rather keep it as a receivable or an account titled "Goods on Approval." The cost of goods sold remains at Rs.1,00,000 until the customer decides to purchase the goods.
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Similar B Com Doubts

3. Modi Textiles, Delhi consigned to Vinod Enterprises, Calcutta 100 cotton bales. The invoice price of each bale was Rs. 1,500 which includes 20% profit on invoice price. The Consignor paid Rs. 2,500 for insurance and Rs. 4,000 for carriage and freight. The Consignee received cotton bales and sold 75 bales for cash and realised Rs. 1,12,500. He incurred Rs. 1,800 on godown rent and was allowed 10% conmission on sales. 5 cotton bales were spoiled in godôwn and they are to be valued at 50% depreciation. Show Consignment Account in the books of Modi Textiles. Note : These write Unive Hint: The damaged goods are also to be included in stock and they will be valued at 50% of the invoice price and the proportionate expenses. (Answers: Profit Rs. 1,412, Value of stock Rs. 35,212 (including Rs. 3,912 for damaged goods); Amount due from the Consignee Rs. 99,450)?

Sales include goods worth Rs. 1,50,000 sent to a customer on approval and remaining unsold on 31.3.2013. The cost of the goods was Rs. 1, 00, 000 .?
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Sales include goods worth Rs. 1,50,000 sent to a customer on approval and remaining unsold on 31.3.2013. The cost of the goods was Rs. 1, 00, 000 .? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Sales include goods worth Rs. 1,50,000 sent to a customer on approval and remaining unsold on 31.3.2013. The cost of the goods was Rs. 1, 00, 000 .? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sales include goods worth Rs. 1,50,000 sent to a customer on approval and remaining unsold on 31.3.2013. The cost of the goods was Rs. 1, 00, 000 .?.
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