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Ram of Delhi sends out goods costing Rs.2,00,000 to Krishna of Brindaban. Consignor’s expenses Rs.5000. Consignee’s expenses in relation to sales Rs 2000.  4/5th of the goods were sold at 20% above cost. The profit on consignment will be:
  • a)
    Rs.26,000
  • b)
    Rs.32,000
  • c)
    Rs.26,200
  • d)
    Rs.(6,000)
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Ram of Delhi sends out goods costing Rs.2,00,000 to Krishna of Brindab...
(1)total of credit side of consignment a/c = 192000/- ( sales) + ( 40000 + 1000)= 41000(stock with agent+ prop expenses of consignor)= 233000/-
(2)total of debit side of consignment a/c = 200000/- +5000/- +2000/- =207000/-
(3)Difference of debit and credit = 233000- 207000 =26000/-
(4)profit on consignment = 26000/-
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Ram of Delhi sends out goods costing Rs.2,00,000 to Krishna of Brindab...
Calculation of Cost of Goods Sold (COGS)

- Cost of goods sent out by Ram: Rs.2,00,000
- Add: Consignor's expenses: Rs.5,000
- Total cost: Rs.2,05,000
- 4/5th of goods sold at 20% above cost: 4/5 x Rs.2,05,000 x 1.2 = Rs.1,64,400
- Remaining 1/5th of goods: 1/5 x Rs.2,05,000 = Rs.41,000

Calculation of Profit on Consignment

- Revenue from sale of goods: Rs.1,64,400
- Deduct: Consignee's expenses: Rs.2,000
- Net revenue: Rs.1,62,400
- Deduct: COGS (calculated above): Rs.2,05,000
- Loss on sale of remaining goods: Rs. (41,000)
- Therefore, profit on consignment: Rs.26,000 (1,62,400 - 2,05,000 + 41,000)

Hence, option 'A' is the correct answer.
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Ram of Delhi sends out goods costing Rs.2,00,000 to Krishna of Brindaban. Consignor’s expenses Rs.5000. Consignee’s expenses in relation to sales Rs 2000. 4/5th of the goods were sold at 20% above cost. The profit on consignment will be:a)Rs.26,000b)Rs.32,000c)Rs.26,200d)Rs.(6,000)Correct answer is option 'A'. Can you explain this answer?
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Ram of Delhi sends out goods costing Rs.2,00,000 to Krishna of Brindaban. Consignor’s expenses Rs.5000. Consignee’s expenses in relation to sales Rs 2000. 4/5th of the goods were sold at 20% above cost. The profit on consignment will be:a)Rs.26,000b)Rs.32,000c)Rs.26,200d)Rs.(6,000)Correct answer is option 'A'. Can you explain this answer? 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 Ram of Delhi sends out goods costing Rs.2,00,000 to Krishna of Brindaban. Consignor’s expenses Rs.5000. Consignee’s expenses in relation to sales Rs 2000. 4/5th of the goods were sold at 20% above cost. The profit on consignment will be:a)Rs.26,000b)Rs.32,000c)Rs.26,200d)Rs.(6,000)Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Ram of Delhi sends out goods costing Rs.2,00,000 to Krishna of Brindaban. Consignor’s expenses Rs.5000. Consignee’s expenses in relation to sales Rs 2000. 4/5th of the goods were sold at 20% above cost. The profit on consignment will be:a)Rs.26,000b)Rs.32,000c)Rs.26,200d)Rs.(6,000)Correct answer is option 'A'. Can you explain this answer?.
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