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QUIZ-CONSIGNMENT

PROF ZENAIDA VERACRUZ- MANUEL

A. THEORY. Letter choices on the date column of your worksheet.
1. The consignment in account was credited for P12,000 and the consignment out was
credited for the same amount . This represents revenue earned from consignment. From
whose viewpoint is the second statement correct?
a)
From both consignee and consignor c) From consignor only
b)
From consignee only.
d) some deductions from both should be made first
2. If all consigned goods were sold, a debit balance in the consignment out account
represents
a) consignment loss
c) inventoriable cost
b) deferred costs
d) advances received
3. If consignor allowed consignee to sell on account, in consignor’s book this is recorded as
a) due from consignee
c) inventoriable cost
b) deferred cost
d) due to consignor
4. Consignor paid freight on goods consigned. If goods are unsold, freight should be part of
a) expenses
c) inventoriable cost
e) both b) and c)
b) balance of consignment out d) balance of consignment in f) b), c and d) are correct
5. Principle of matching is applied to which of the following costs?
a) Installation
c) commission
e) none of the aforementioned costs
b) delivery
d) all
6. Goods on consignment including freight and insurance are inventoriable cost of
a) consignor until it is sold c) both consignee and consignor
b) consignee until it is sold d) neither consignee nor consignor
7. Consignor recognizes revenue when consigned goods are
a) shipped to consignee
c) sold by consignor to consignee
b) received by consignee
d) included in the account sales
8. The title Merchandise Shipment on Consignment is closed in consignor’s book at the end
of the accounting period to determine
a) total cost of goods sold
c) total cost of goods shipped
b) regular cost of goods sold
d) total cost of goods returned
9. If consignee did not make a full remittance, which account will have a debit balance?
a) Consignment In
c) Due From Consignee
b) Consignment Out
d) Both a) and c)
10. Consigned goods while in the hands of the consignee should be
a) deducted from consignor’s available for sale
c) added to consignor’s inventory
b) added to consignee’s inventory
d) recorded as Due from Consigne
PROBLEMS (Problems A and D on the left side of the worksheet. Problems B and C on
the right side.
A. (RPCPA EXAM) Aircon Inc. consigned 12 one-horse power air-condition units to Argy
Trading and paid P2,000 freight out. Gross margin is 25% of selling price which was set
for P12,000. The consignee is allowed a commission of 5% on sales but is required to give
an advance payment to be deducted proportionately based on sales made. Argy Trading’

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Henry made only an 80% remittance of the total amount due. sells piano for Key Inc. The amount over P1.account sales on December 2015. which was to sell them at any price above P1. Moran paid the trucking cost of P200 and is to reimburse Dizon for local delivery to customers. delivery and installation of P1.300 1. During December. Dizon Marketing sold three fans. Related expenses needed were incurred by Henry and full remittance was made.750 shipping cost for the shipment.000 Just before the year ended in 2015.500 each and one on credit at P1. Full remittance is required within a month from the time goods are sold. Sales (3) P3. 2. Two more units were sold on January2016. 2) All entries in the books of the consignor. B. 500 Returns (3) 300 6.Key Inc. goods sold. Moran Appliances consigned on November 5 five electric fans costing P800 each to Dizon Marketing Company. Henry Inc.000 will represent consignee's commission. 3) Give the proper presentation of the balances in the balance sheet of a) consignee and b) consignor. 3. Question 1: How much will be remitted? Question 2: How much is Key’s consignment profit or loss? Question 3: How much is inventoriable cost of Key? D. Required: 1. C.000.MANUEL . Reclassifying entry(s) of consignor. how much should it remit to Moran Appliances? Question 2: How much is the profit to date of Moran Appliances resulting from the consignment? Question 3: How much is the profit to date of Dizon? QUIZ-CONSIGNMENT 152 PROF ZENAIDA VERACRUZ. goods sold. gave a remittance for 6 units sold after deducting selling expenses of P800. Prepare an account sales. Sales price is 100% above cost.200 and the appropriate commission and advances. Entries in the books of the consignor. Consignment profit is determined separately.800 of which it had collected 50%. goods returned. on consignment basis. Support with a table analyzing for cost of total shipment. Key paid P2.050 P21. two for cash at P1. His ledger postings show among others the following account: Freight and Insurance (10 pianos) Delivery Commission Freight for 3 pianos returned Consignment In . Dizon paid P170 for local delivery to customers. if any. Required: 1) Entries in the book of the consignee to record only a) remittance and b) reclassification for reporting purposes. REFER TO PROBLEM B. Question 1: Assuming that Dizon Marketing made interim settlement as of December 15.

200 3. Nippon 60.600 66. A 3A 4A 5E 6D 7.000 5.000 Cash Advances from Consignee 3.400 6.880 Due to consignor 20%= P1.000 108. Sales Cost of Sales (72.000 x 75%) Commission Selling Expenses Delivery & Installation Freight (2.000 x 6/12) Net Profit Prob B 1. Sales (6 x 12.000) Less: Selling Installation Commission Balance Less: Advances Due for remittance Units on Hand 2.600 P 11.D 8.000 P54. C Prob A PROBLEMS 1.000 12. 72.400 55. Consignment Out – Argy Merchandise Shipment on consignment 5.SOLUTION 1.400 6.400 P9. Balance of the consignment in represents amount for remittance Remittance 80% of P9850= P7.600 12.600 800 1.600 Consignment Out Consignment Profit 11.000 11.000 60.400 6 108.000 Consignment Out – T.880 7.000 3.000 Cash Advances Consignment Out Consignment Out – T.970 1) Consignment In -Key Inc.850 7. Nippon Cash 2.880 153 .B 9C 11.000 60.200 1.000 P72.400 Reclassifying entry: Merchanise Inventory-Consignment Deferred Consignment Expenses Consignment Out (unsold including freight) This should close the consignment out account. Entries (Consignor) a.000 1. Cash 54.000 2.C 2.000 72.000 800 1.

100 1.500 900 Total 35.150 1.400 3 Returns 10.570 P 1.300 1.000 10.970 b) Entries in the Books of Consignor Consignment Out – Henry Inc.000 1.900 P 900 Reclassifying entry: Reclassifying entry: Merchanise Inventory-Consignment Deferred Consignment Expenses Consignment Out (unsold including freight) 14.500 300 6.925 900 3 Sold 10.500 825 1.970 Consignor’s Balance Sheet Current Assets: Due from Consignee Merchandise Inventory-Consignment Deferred Consignment Expenses 154 35.050 48.000/3 = 7.970 Merchandise Shipment on Consignment Consignment Out 10.050 16.000 2.500 x 10) 35.000 /200% = 3.750 21.300 18.500 P 1.000 2.750 Cash Consignment Out – Henry Inc.750 3.900 Sales Less charges for goods sold Expenses for goods returned Consignment Loss 4 Unsold 14.500 825 1.975 2.880 11. Due from Consignee Consignment Out – Henry Inc.970 14.000 (200) (4. Cash 7.500 3) Consignee’s Balance Sheet Current Liability-Due to Consignor C.425 P18.2) Consignment In Due to Consignor 1.200) 9.970 14.500 1.000 21. Merchandise Shipment on Consignment (21.000 2.500 .050 13.970 P11.000) Less: Delivery Expenses to be reimbursed Commission Balance to be remitted from addtl sales Due to Consignor previous swales Total 16.500 Consignment Loss Consignment Out Cost Shipping Cost Freight Delivery Commission Freight 2.000 2.050 300 6.600 1. 1) Sales (2x 7.975 P21. Table 1.000 Consignment Out – Henry Inc.

000 1.000 = 82.000 12.500 85% P2.Consignment Deferred Consignment Expenses Consignment Out debit balance D.500 7.000 5 sets /25.500 P 93. units sold 2.000 550 4.500 1.500 1. a) For remittance (3 x 1. Cartage Freight Balance Less check endorsed Balance still due Returns * 2.500 Consignment Sales 3.650 P 1.800 3.000) Profit of Dizon representing commission 4.000) Less: Delivery Expenses Balance to be remitted b) Sales Less: c) 7. Commission Advertising 93.050. & Inst.000 307.735.800 3.000 1.642.350 P7.500 x 2 = 3.830 COS (3 x 800) Trucking Cost (3/5 x 200) Delivery Expense Profit of Moran Appliance 2.250 P8.000 1.000 2.690 P 310 Exercise 4 4.000) Less: Commission Advertising Del.000 1.500 314.050.250 3.642.050.400 120 170 Sales (1.000 170 2.200 700 200 14.500 3. a.000 Consignment in – White Power House 307.500) Shipping Cost Commission Freight Delivery Expense Profit of Moran Appliance 3) Inventory.250 Balance still due Remittance Total Less charges except commission Net after 15% commission Divide by Total Sales b.000 155 .735.500 1.500 750 1.000 + 1.742.500 1.2) Sales Less: COS (2 x 3.800) Less: Contract Price (3 x 1. * Sales (80 x 25.

33 1.000 1.120.000 Consignment Sales 1.250 750 1.000 932. Cartage Commission Advertising Total (150) Total 1.060.500 .00 630.050. & Inst.00 748.000 5.310 50.000 each for 15% commission.000 2.500 2.299.00 1.67 2.500.000 1.ated to sets sold Expenses related to return Consignment Profit c) (63) Sets Unsold (82) Sets Sold 756.67 750. Merchandise 300.00 d) Sales Less: Charges rel.00 820.642.250.000 932.250 1.500 Consignment Out – Eternal Power Block 1.642.050.00 183.500 60. Cartage Freight Remittance Merchandise shipped Freight Commission Advertising Del.000 1.00 1. Cartage Freight Profit c) 750 1.000 2.500 1.500 60. & Inst.000.750 1.500 750 500 250 748.576. Consignment In –White Power House Cash Consignment Receivable Cash Consignment In –White Power House Cash Consignment Receivable Returned 5 Generators to White Power House Consignment In – White Power House Cash Consignment In – White Power House Cash 156 (5) Sets Ret. expenses reimbursable.500 3.483. 5.025.000.006.025.299.500 307.576.33 984.250 1. & Inst.000 Ret.00 Entries on books of consignee Received 150 generators from White Power House to be sold at P25.00 307.67 1.000 3.33 _________ 758.483.800.050.000 3.Del.940 Analysis of Cost and Expenses Charges of Consignor Cost of Merchandise Freight Charges of Consignee Freight On Return Del.500 5.940.00 ________ 61.800.250 1.500 3.750 2.000 1.301.940.00 1.642.

940 157 .940 1.800.000 314.000 5.050.800.500 60.000 748.Books of Consignor Consignment Out – Eternal Power Block Merchandise shipment on consignment Consignment Out – Eternal Power Block Cash Cash Due from Consignee Consignment Out – Eternal Consignment Out – Eternal Merchandise Shipment on Consignment Consignment Out – Eternal Consignment Out Consignment Profit or Loss 1.000 5.642.500 93.000 748.500 1.500 2.000 60.