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Mr. A consigned 200 cycles @ 500 each and paid * 3,000 on freight. During the transit 20 cycles were lost by theft. Mr. B received the remaining stock and paid ₹ 3,600 on its clearing. He sold 150 cycles @ 800 per cycle. He was entitled for 10% commission on sales. He paid * 5,000 as miscellaneous expenses. Prepare Consignment Account in books of Mr. A.?
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Mr. A consigned 200 cycles @ 500 each and paid * 3,000 on freight. Dur...
Consignment Account in books of Mr. A


Particulars


  • Consigned 200 cycles @ 500 each

  • Freight paid: 3,000

  • 20 cycles lost by theft



Calculation of Cost of Goods Sold (COGS)


  • Total Cost of consigned cycles: 200 × 500 = 1,00,000

  • Freight paid: 3,000

  • Value of lost cycles: 20 × 500 = 10,000

  • COGS: 1,00,000 + 3,000 - 10,000 = 93,000



Calculation of Commission


  • Sales: 150 × 800 = 1,20,000

  • Commission: 1,20,000 × 10% = 12,000



Preparation of Consignment Account










































Particulars Amount (₹)
To Cycles Account (200 × 500) 1,00,000
To Freight Account 3,000
To Theft Account (20 × 500) 10,000
To Profit & Loss Account (COGS) 93,000
By B's Account (150 × 800) 1,20,000
By Commission Account 12,000
By Miscellaneous Expenses Account 5,000
By Balance c/d 2,000
Total 2,32,000


Explanation


  • The consignment account is prepared to record the transactions related to the consignment of goods.

  • The cost of the consigned goods along with the freight paid is debited to the consignment account.

  • The value of the lost goods is debited separately to the theft account.

  • The COGS is calculated and debited to the consignment
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Mr. A consigned 200 cycles @ 500 each and paid * 3,000 on freight. During the transit 20 cycles were lost by theft. Mr. B received the remaining stock and paid ₹ 3,600 on its clearing. He sold 150 cycles @ 800 per cycle. He was entitled for 10% commission on sales. He paid * 5,000 as miscellaneous expenses. Prepare Consignment Account in books of Mr. A.?
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