B of mumbai consigned 100 cases ( cost price ₹7500) at a proforma invo...
Consignment Account PreparationThe consignment account records the transactions between the consignor (B) and the consignee (C). Here’s how the accounts are structured:
- Cost Price of Goods Sent: ₹7500
- Expenses Incurred by B: ₹600
- Total Cost to B: ₹7500 + ₹600 = ₹8100
- Proforma Invoice Value: 25% Profit on Sale
- Sale Price by C: ₹10500 (for 80 cases)
Consignment Account| Particulars | Amount (₹) |
|--------------------------------------|---------------|
| To Goods Sent to C | 7500 |
| To Expenses by B | 600 |
| To Profit on Sale | 2100 |
| (25% of Sale Price ₹10500) | |
| To C's Commission | 525 |
| (5% of ₹10500) | |
| Total | 10500 |
Account of C (Consignee Account)| Particulars | Amount (₹) |
|--------------------------------------|---------------|
| By Cash Received | 4000 |
| By Sale of Goods (80 cases) | 10500 |
| By C's Commission | 525 |
| By Excess Sales Price Commission | 800 |
| (10% of ₹8000, where ₹8000 is excess over invoice ₹2000) | |
| Total | 16825 |
Summary of Transactions- Total Sales: ₹10500
- Total Expenses by C: ₹1200 (Octroi and Duties)
- Total Amount Remitted to B: ₹4000
- Total Commission to C: ₹1325 (5% on sales + 10% on excess)
This detailed breakdown illustrates the financial relationship between the consignor and consignee, showcasing the costs, sales, and commissions involved in the consignment process.