Problem I
1. The journal entries shown below would be made on the consignors and consignees
books (assume the use of perpetual inventory):
Transactions
Shipment of goods
on consignment.
2. Payment of
expenses by
consignor.
3. Payment of
expenses
by consignee.
Advances by
Consignor
Inventory on
Consignment..
Cash..
No entry
Inventory on
Consignment
Consignee
Payable
Cash
Advances from
Consignee..
Sale of merchandise
No entry.
6. Notification of sale
to consignor and
payment of cash
due.
Commission:
10% x P48,000 =
P4,800
Commission
expense
Advances from
Consignee
Cash.
Consignee
Payable
Consignment
Sales
Revenue..
No entry
(memorandum
entry only)
600
600
Consignor
Receivable
2,400
2,400
Cash.
3,360
3,360
4,800
3,360
37,44
0
2,400
48,00
0
Advances to
Consignor
Cash
Cash
Consignor
payable
Consignor
Payable..
Commission
Revenue..
Consignor
Receivable
..
Cash
Advances
from
Consignee
7. To record cost of
goods sold and
related costs.
** (P60,000 + P600
+
P2,400) x =
P31,500
Cost of goods
sold**
Inventory on
Consignment
2,400
2,400
3,360
3,360
48,00
0
48,00
0
48,00
0
4,800
2,400
37,44
0
3,360
31,50
0
31,50
0
*if periodic method is used, the credit should be consignment shipments account treated
as reduction in the Costs of goods available for sale to arrive at Cost of Goods Sold Available
for Regular Sale.
2. The remittance amounting to P37,440 can be determined by preparing the Account Sales
as follows:
Sold for the Account of:
Jingka Juice
Sales (60 sachets of herbal goods)
Charges:
Finishing costs..
Commission (P48,000 x 10%)..
Due to Consignor.
Less: Advances.
Balance
Remittance Enclosed
Balance Due
Items on Hand (50 sachets of herbal goods): P60,000 x
50%
P48,000
P 2,400
4,800
P30,000
Problem II
1. The account sales:
Sold for the Account of:
AA Company
Sales (8 sets @ P24,000)
Charges:
Freight-in
Advertising expense
Deliveries and installation expenses
Repairs expense on units sold..
Commissions, 25% of sales
Due to Consignor.
Less: Advances.
Balance
Remittance Enclosed
Balance Due
Items on Hand
Items Returned (defective)..
7200
P40,800
3,360
P37,440
37,440
P
0
P
192,000
P 6,000
2,400
9,600
4,800
48,000
70,80
0
P121,200
0
P121,200
30,000
P 91,200
15 sets
2 sets
456,000
110,400
257,600
228,000
244,720
P 192,000
99,600
67,200
P 25,200
456,000
368,000
228,000
244,720
Farley Hardware
No entry upon receipt of consigned merchandise.
Cash (P920 x 400)
Consignor Payable
Commission Revenue
368,000
Consignor Payable
Cash
244,720
257,600
110,400
49. Seahawks, Inc. had the following consignment transactions during December:
244,720
P18,000
900
12,000
500
= 8 tapes
Sales .. P1,600
Less Commission of consignee...
400
Amount remitted by Beta View Store...P1,200
2. a P 370
Total
Charges
(25)
Consignors charges:
Cost
Freight-out
Consignees charge - Commission
Total
Sales price
Consignment profit
P2,500
75
__400__
P2,975
Charges Related to
Consignment
Inventory on
Sales
Consignment
(8)
(15)
P800
30
__400__
1,230
_1,600_
_P370_
P1,500
45
_______
_P1,545_
P15,000
P 1,000
15 units
Sales
Less Charges:
Commission
Advertising
Delivery expense
Due to Consignor
Less: Advances
Value of note sight draft: (100 beds x P600 per bed) x
60%
Multiplied by: Proportional number of beds sold
Amount remitted
P15,000
5. c
P 2,250
1,500
___750
__4,500
P10,500
P36,000
15/100
__5,400
P 5,100
6. d P1,500
Sales
Less Charges:
Consignors charge:
Cost of beds (P600 per bed x 15 beds)
Consignees charges:
Commission
Advertising
Delivery expense
Consignment net income
7. a no items were sold in November;
Sales (unknown)
Less Charges:
Commission
Remittance
P15,000
9,000
P2,250
1,500
___750
15% x
P 27,200
x 15%x = P27,200
85%x = P27,200
x = P32,000
8. c P16,800
Sales (unknown)
Less Charges:
Advertising
Delivery and installation
charges
Commission (unknown)
Remittance
x
P500
100
20%x
_______
P 12,840
P6,000
80
P6,080
x
20%x
P1,000
600
500
P21,900
__4,500
P1,500
Charges Related to
Consignment
Inventory on
Sales
Consignment
(6)
(3)
P30,000
2,500
P18,000
1,750
P9,000
750
6,000
1,000
600
__500__
P40,600
6,000
1,000
600
__350__
27,700
_30,000_
__P2,300__
__150__
_P9,900_
P
8,400
__168
P 8,232
P 800
_1,260
__2,060
P 6,172
_6,000
P 172
16. b
Total
Charges
(100%)
Consignors charges:
Cost
Freight
Consignees charges:
Expenses
Commission (15% x P10,500)
Cash discount (P10,500 x 80% x
Charges Related to
Consignment
Inventory on
Sales
Consignment
(70%)
(30%)
P10,000
120
P 7,000
84
800
1,575
168
800
1,575
168
P 3,000
36
2%)
Total
Sales price (70% x P15,000)
Profit on Consignment
P12,663
P 9,627
_10,500_
P
873
_P9,900_
P 150
30
P 180
___50
P 230
___46
P 184
17. d P140
Total
Charges
(5)
Consignors charges:
Cost
Freight
Consignees charges:
Commission
Total
Sales price (4 units x P250/unit)
Profit on Consignment
Charges Related to
Consignment
Inventory on
Sales
Consignment
(4)
(1
P 775
50
P 620
40
P 155
10
200
P1,025
200
P 860
_ 1,000
P 140
____
P165
P 3,000
___450
P3,450
P 320
__720
__1,040
P 2,410
20. a
Total
Charges
(5)
Consignors charges:
Cost
P4,000
Charges Related to
Consignment
Inventory on
Sales
Consignment
(3)
(2)
P 2,400
P 1,600
Freight
Consignees charges:
Freight
Commission
Total
Sales price
Profit on Consignment
200
120
320
720
P5,240
80
192
720
P 3,432
4,800
P 1,368
128
______
P1,808
P298,000
P 2,000
7,000
_44,400
__53,400
P
244,600
23. d P67,280
Total
Charges
(30)
Consignors charges:
Cost
Freight-out
Consignees charges:
Sales allowance
Bad debts
Commission
[15% x (P298,000 P2,000)]
Total
Sales price [P14,000 per unit x 12
units)
+ (P13,000 per unit x 10 units)]
Consignment profit
Charges Related to
Consignment
Inventory on
Sales
Consignment
(22)
(8)
P240,000
1,800
P176,000
1,320
2,000
7,000
2,000
7,000
44,400
P295,200
44,400
P230,720
P64,000
480
_P64,480_
298,000
P 67,280
__x__ P10
P100
__P45__
Delivery expense
Remittance
x-
x _P10x_ = P35,550
P100
= P35,505
)
________
P35,505
Regular Sales
P120,000
84,000
P 36,000
Consignmen
t Sales
P30,000
19,500*
P10,500
Total
P150,000
103,500
P 46,500
P 1,500
1,950
P 1,500
1,950
3,030
P 4,725
P 5,775
3,030
_P16,845_
P29,655
12,120
_______
P 12,120
P 23,880