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On 31st December 2020 goods sold at sale price of ₹6000 were lying with customer, Sapna to whom these goods were sold on sale or return basis were recorded as actual sales . Since no consent has been received from Sapna ,you are required to pass adjustment entries presuming hoods were sent on approval at profit of cost plus 20%.Present market price is 10% less than the cost price.?
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On 31st December 2020 goods sold at sale price of ₹6000 were lying wit...
Adjustment Entries for Sale or Return Basis Goods
Introduction
In this scenario, goods were sold at a sale price of ₹6000 on a sale or return basis to Sapna. However, the goods were not returned and recorded as actual sales. As no consent was received from Sapna, adjustment entries need to be passed. We will presume that the goods were sent on approval at a profit of cost plus 20%, and the present market price is 10% less than the cost price.
Adjustment Entries
To rectify the situation, the following adjustment entries need to be passed:
1. Reversal of Sales Entry
The first entry to be passed is the reversal of the sales entry. The original entry recorded the sale of goods to Sapna on a sale or return basis. This entry needs to be reversed to reflect that the goods were not sold.
2. Creation of Goods Sent on Approval Account
To account for the goods sent on approval, a new account needs to be created called "Goods Sent on Approval." This account will reflect the cost of the goods sent on approval.
3. Recording of the Cost of Goods Sent on Approval
The cost of the goods sent on approval needs to be recorded in the "Goods Sent on Approval" account. As per the question, we will presume a profit of cost plus 20%. Therefore, the cost of the goods sent on approval will be ₹5000.
4. Recording of Sales on Approval
As the goods were not returned and recorded as actual sales, they need to be recorded as sales on approval. The sales on approval will be recorded at cost plus 20%, which is ₹6000.
5. Adjustment for Present Market Price
As per the question, the present market price is 10% less than the cost price. Therefore, an adjustment entry needs to be passed to reflect the decrease in the value of the goods. The adjustment entry will reduce the value of the "Goods Sent on Approval" account and the "Sales on Approval" account.
Conclusion
In conclusion, adjustment entries need to be passed to rectify the situation where goods sent on a sale or return basis were not returned and recorded as actual sales. The adjustment entries will account for the goods sent on approval, the cost of the goods, and the sales on approval. Additionally, an adjustment entry needs to be passed to reflect the decrease in the value of the goods.
Introduction
In this scenario, goods were sold at a sale price of ₹6000 on a sale or return basis to Sapna. However, the goods were not returned and recorded as actual sales. As no consent was received from Sapna, adjustment entries need to be passed. We will presume that the goods were sent on approval at a profit of cost plus 20%, and the present market price is 10% less than the cost price.
Adjustment Entries
To rectify the situation, the following adjustment entries need to be passed:
1. Reversal of Sales Entry
The first entry to be passed is the reversal of the sales entry. The original entry recorded the sale of goods to Sapna on a sale or return basis. This entry needs to be reversed to reflect that the goods were not sold.
2. Creation of Goods Sent on Approval Account
To account for the goods sent on approval, a new account needs to be created called "Goods Sent on Approval." This account will reflect the cost of the goods sent on approval.
3. Recording of the Cost of Goods Sent on Approval
The cost of the goods sent on approval needs to be recorded in the "Goods Sent on Approval" account. As per the question, we will presume a profit of cost plus 20%. Therefore, the cost of the goods sent on approval will be ₹5000.
4. Recording of Sales on Approval
As the goods were not returned and recorded as actual sales, they need to be recorded as sales on approval. The sales on approval will be recorded at cost plus 20%, which is ₹6000.
5. Adjustment for Present Market Price
As per the question, the present market price is 10% less than the cost price. Therefore, an adjustment entry needs to be passed to reflect the decrease in the value of the goods. The adjustment entry will reduce the value of the "Goods Sent on Approval" account and the "Sales on Approval" account.
Conclusion
In conclusion, adjustment entries need to be passed to rectify the situation where goods sent on a sale or return basis were not returned and recorded as actual sales. The adjustment entries will account for the goods sent on approval, the cost of the goods, and the sales on approval. Additionally, an adjustment entry needs to be passed to reflect the decrease in the value of the goods.
Community Answer
On 31st December 2020 goods sold at sale price of ₹6000 were lying wit...
The answer is 4000?
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On 31st December 2020 goods sold at sale price of ₹6000 were lying with customer, Sapna to whom these goods were sold on sale or return basis were recorded as actual sales . Since no consent has been received from Sapna ,you are required to pass adjustment entries presuming hoods were sent on approval at profit of cost plus 20%.Present market price is 10% less than the cost price.?
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On 31st December 2020 goods sold at sale price of ₹6000 were lying with customer, Sapna to whom these goods were sold on sale or return basis were recorded as actual sales . Since no consent has been received from Sapna ,you are required to pass adjustment entries presuming hoods were sent on approval at profit of cost plus 20%.Present market price is 10% less than the cost price.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about On 31st December 2020 goods sold at sale price of ₹6000 were lying with customer, Sapna to whom these goods were sold on sale or return basis were recorded as actual sales . Since no consent has been received from Sapna ,you are required to pass adjustment entries presuming hoods were sent on approval at profit of cost plus 20%.Present market price is 10% less than the cost price.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 31st December 2020 goods sold at sale price of ₹6000 were lying with customer, Sapna to whom these goods were sold on sale or return basis were recorded as actual sales . Since no consent has been received from Sapna ,you are required to pass adjustment entries presuming hoods were sent on approval at profit of cost plus 20%.Present market price is 10% less than the cost price.?.
On 31st December 2020 goods sold at sale price of ₹6000 were lying with customer, Sapna to whom these goods were sold on sale or return basis were recorded as actual sales . Since no consent has been received from Sapna ,you are required to pass adjustment entries presuming hoods were sent on approval at profit of cost plus 20%.Present market price is 10% less than the cost price.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about On 31st December 2020 goods sold at sale price of ₹6000 were lying with customer, Sapna to whom these goods were sold on sale or return basis were recorded as actual sales . Since no consent has been received from Sapna ,you are required to pass adjustment entries presuming hoods were sent on approval at profit of cost plus 20%.Present market price is 10% less than the cost price.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 31st December 2020 goods sold at sale price of ₹6000 were lying with customer, Sapna to whom these goods were sold on sale or return basis were recorded as actual sales . Since no consent has been received from Sapna ,you are required to pass adjustment entries presuming hoods were sent on approval at profit of cost plus 20%.Present market price is 10% less than the cost price.?.
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