CONSIGNMENT TUTORIAL AND REVIEW QUESTIONS

Question One

On October 1st 2010 Mercy of Dar es Salaam consigned to Nandy of Pretoria South Africa, 50 bales of merchandise.

The merchandise cost Mercy TAS 78,000,000: carriage to port, paid by her was TAS 400,000. Hall paid freight at
TAS 300,000 per bale, dock dues and landing charges of TAS 3500,000 and marine insurance TAS 2,600,000.
Brokerage was 2 per cent and commission 2.5 percent.

On January 31st 2011 Nandy had completed sales of the whole of this merchandise realizing TAS 150,000,000. He
settled the net proceeds by a bill at three months which Mercy discounted for TAS 126,000,000. The bill was duly
met on maturity.

You are required to:

a) Make Out Account in books of Nandy

b) Make Out Account in books of Mercy

Question Two

Cailyn and Collin Company of Dar es Salaam had goods, cost price TAS 60,000,000, which they found difficult to sell
on the local market. They therefore consigned Mr Metsusande of Gaborone Botswana with a pro forma invoice for
TAS 100,000,000 on 17th March.

Cailyn and Collin Company paid the following expenses in respect of the consignment- packing TAS 320,000, freight
3,600,000.

Mr Metsusande received the goods on 20th March and incurred storage expenses of TAS 1,300,000 before the goods
were sold.

The whole consignment was sold by auction on 28th March, for TAS 120,000,000 les auctioneer’s commission of 6
per cent. Mr Metsusande own commission was TAS 6,800,000. Metsusande Paid the balance due to Cailyn and
Collin Company on 31st March.

Prepare the accounts recording the above in the ledger of

(i) The Consignor

(ii) The Consignee

Question Three

On 1st October 2010 H&M Ltd sent goods costing TAS 240,000,000 on consignment to Pearl Ltd in Northern Ireland.
H&M ltd paid freight TAS 8,920,000 and insurance TAS 6,760,000 on the goods. All bill drawn by H&M Ltd on Pearl
Ltd payable in three months’ time for TAS 120,000,000 was discounted by H&M Ltd for TAS 118,200,000.

On 31st Dec 2010, H&M Ltd received an Account Sales from Pearl Ltd showing sales of TAS 332,000,00,
commission TAS 40,000,000 and expenses TAS 37,000,000. Stock remaining unsold in the hands of Pearl Ltd was
TAS 82,000,000 at original cost.

Pearl Ltd settled the balance due for goods by means of a two month bill. H&M Ltd discounted the bill with the bank,
which deducted TAS 17,000,000 from its face value for charges.

You are required to show the necessary ledger accounts (excluding Cash) in the books of both companies recording
the above transactions.

Question Four

On 1st March 2009 Katrina consigned cloth to the value of TAS 32,000,000 at cost to her agent Easysell, and by
arrangement drew a 90 day sight bill on him for 80% of the value. Katrina discounted the bill with the bank who
charged TAS 1,300,000 for the service.

Katrina’s normal selling price was cost plus 50% and Easysell was entitled to commission at the rate of 10% on
normal selling price plus 25% of any surplus prices above normal.

Katrina paid haulage TAS 850,000 and insurance TAS 650,000 on the goods. The bill of exchange was dishonoured
upon presentation and Easysell agreed to accept another bill payable 30 days after sight for the face value plus
interest charges of TAS 450,000. The second bill was honoured on the due date.

On 30th September 2009 Easysell notified Katrina of sales amounting to TAS 48,000,000 with one fifth of the goods
remaining unsold. Easy sell enclosed a cheque for the balance due after deducting his commission and also TAS
1,210,000 for selling expenses.

You are required to show how the above transactions would appear in the ledger accounts for both Katrina and
Easysell.

JOINT VENTURE TUTORIAL AND REVIEW QUESTIONS

Question One
Candy and Cindy entered into joint Venture to buy and sell second hand cars. Profits and losses
were to be shared: Candy two- thirds and Cindy one – third.

On May 10th 2010, Candy purchased two cars for TAS 6,200,000 and TAS 8,800,000
respectively. She incurred expenditure of TAS 360,000 on repairs and on June 1st 2010 sold one
of the cars for TAS 9,400,000 and on June 10th, 2010, the other car for TAS 10,400,000.
On June 13th, 2010, he purchased a further car for TAS 7,400,000 which was sold on June 20th
2010, for TAS 8,600,000 which amount was paid to Cindy who paid it into her own bank
account.
On May 14th 2010, Cindy purchased a car for 5,300,000 which she had sold for TAS 6,700,000
on May 16th, 2010, having incurred expenses of TAS 260,000 on it. This car was returned by the
customer on May 20th, 2010, who was allowed a refund of TAS 6,400,000 for it. As this car still
unsold on June 28th 2010, it was agreed it should be taken over by Candy at a valuation of TAS
6,250,000.
On June 30th 2010, the sum required in full settlement as between Candy and Cindy was paid
by the part accountable.

You are required to prepare

a) The accounts for the joint venture in the books of Candy and Cindy
b) Memorandum Joint Venture account

Question Two
Mary and Lona entered into joint venture to buy and sell machinery. Profits and losses were to
be shared: Mary three-fourth, Lona one- fourth.

On 23rd March, 20X9 Mary purchased two machinery for TZS 5,200,000 and TZS 7,200,000
respectively. She incurred expenditure of TZS 2,040,000 on repairs and on 4th may 20x9, sold
one of the machinery for TZS 8,400,000 and on may 10th 20x9 the other machinery for TZS
11,250,000, paying the proceeds in each case in her own bank account.

On 15th may 20x9 she purchased a further machinery for TZS 7,600,000 and sold it on credit on
31st May, 20x9 for TZS 9,080,000 the amount which was collected later by Lona. On 20th June
20x9 Lona drew a cheque of TZS 5,040,000 to Mary who used it to meet joint venture
expenditure.

On 25th March 20x9, Lona purchased machinery for TZS 6,350,000 on which she incurred
expenditure of TZS 1,080,000 and which she sold on 10th April, 20x9 for TZS 8,500,000 and
paid it into her bank account. This machinery was returned by the purchaser on 20th April 20x9
and Lona paid him TZS 8,360,000 for it. As this machinery was still unsold on 31st may 20x9, it
was agreed that it should be taken over by Lona at a valuation of TZS 8,450,000.

On 12th July 20x9 Lona purchased another machinery for TZS 7,600,000 which was sold on 15th
July 20x9 for TZS 8,800,000 by Mary who paid it into her own bank account.
0n 31st July 20x9, the sum required in full settlement as between Mary and Lona was paid by
the party accountable.

You are required to prepare

a) The accounts for the joint venture in the books of Mary and Lona (12 Marks)
 b) Memorandum Joint Venture account (08 Marks)

Question Three
Kayla and Renee entered into joint venture to buy and sell second-hand cars. Profits and losses
were to be shared: Kayla three-fifths, Renee two- fifths.
On 23rd March, 20X9 Kayla purchased two cars for TZS 460,000 and TZS 600,000 respectively.
She incurred expenditure of TZS 140,000 on repairs and on 4th may 20x9, sold one of the cars
for TZS 670,000 and on may 10th 20x9 the other car for TZS 750,000, paying the proceeds in
each case in her own bank account.

On 15th may 20x9 she purchased a further car for TZS 800,000 and sold it on credit on 31st
May, 20x9 for TZS 780,000, the amount which was collected later by Renee. On 20th June 20x9
Kayla drew a cheque of TZS 400,000 to Renee who used it to meet joint venture expenditure.

On 25th March 20x9, Renee purchased a car for TZS 350,000 on which she incurred expenditure
of TZS 80,000 and which she sold on 10th April, 20x0 for TZS 500,000, and paid it into her bank
account. This car was returned by the purchaser on 20th April 20x0 and Renee paid him TZS
460,000 for it. As this car was still unsold on 31st may 20x0, it was agreed that it should be
taken over by Renee at a valuation of TZS 450,000.

On 12th July 20x9 Renee purchased another car for TZS 600,000 which was sold on 15th July
20x9 for TZS 800,000, by Kayla who paid it into her own bank account.

Other expenditure was incurred by the parties as follows:

Kayla Renee

Insurance TZS 25,000 TZS 5,000

Garage TZS 20,000 TZS 10,000

0n 31st July 20x9, the sum required in full settlement as between Kayla and Renee was paid by
the party accountable.

You are required to prepare

a) The accounts for the joint venture in the books of Kayla and Renee
b) Memorandum Joint Venture account
Question four (Exam type Question)
Eddie and Nandy entered into joint venture to buy and sell a quantity briar pipes. It was agreed
that Nandy should received a commission of 4% on all sales in consideration for which she was
to bear all losses from bad debts. Subject to this arrangement, profits and losses were to be
shared 3:2.

On January 2nd 2012, Eddie purchased goods for TAS 7,200,000 for which he paid TAS
5,000,000 in Cash and accepted bills of exchange for TAS 1,000,000 and TAS 1,200,000

On January 3rd, Eddie sent to Nandy goods which had cost TAS 3,000,000 and Nandy paid TAS
4,200,000 to Eddie. In addition, Eddie drew a cheque of 5,000,000 to Nandy for meeting some
operational costs.
On January 9th, Nandy sold goods to Joan for TAS 720,000 and to Sarah for TAS 380,000 and
they accepted bills of exchange for the amounts respectively due from them. Nandy endorsed
both these bills over to Eddie, who discounted them. (Ignore discounting charges).

On February 3rd, Eddie sold goods for TAS 2,400,000. On delivery the customer rejected goods
invoiced at TAS 150,000 and these goods were collected by Nandy, who sold them to another
customer for TAS 180,000.

On February 11th, Sarah met her bill, but Joan’s bill was dis-honoured. Joan was insolvent with
no assets.
On March 5th, Nandy paid the bill for TAS 1,200,000 which had been accepted by Eddie, and
Eddie paid the second bills, TAS 1,000,000
During March 2009, Nandy sold the remainder of the goods in her possession for TAS 3,200,000
and Eddie’s sales amounted to TAS 4,400,000. Bad debts (apart from amount due from Joan)
were TAS 90,000 of which TAS 50,000 was in respect of sales by Eddie and TAS 40,000 was in
respect of sales by Nandy.
On April 30th, 2009 the venture was closed. Eddie took over the stock in his possession at a
valuation of TAS 850,000 and the sum required to settle accounts between the venturers was
paid by the party accountable
You are required to prepare
a) The accounts for the joint venture in the books of Eddie and Nandy
b) Memorandum Joint Venture account, showing the net profit