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Advanced-Accounting-Part 1-Dayag-2015-Chapter-10
Advanced-Accounting-Part 1-Dayag-2015-Chapter-10
Problem I
1. The journal entries shown below would be made on the consignor’s and consignee’s
books (assume the use of perpetual inventory):
2. Payment of
expenses by Inventory on No entry
consignor. Consignment….. 600
Cash…….. 600
3. Payment of Consignor
expenses Inventory on Receivable
by consignee. Consignment…… 2,400 2,400
Consignee Cash……………. 2,400
Payable……… 2,400
Advances by Cash……… 3,360 Advances to
Consignor Advances from Consignor 3,360
Consignee….. 3,360 Cash 3,360
Cash 48,00
Sale of merchandise No entry. Consignor 0 48,00
payable 0
Consignor
Payable..
6. Notification of sale Commission Commission
to consignor and expense
payment of cash Advances from 4,800 Revenue…….. 48,00
due. Consignee…… Consignor 0
Commission: Cash……. 3,360 Receivable 4,800
10% x P48,000 = Consignee 37,44 …..
P4,800 Payable 0 Cash……… 2,400
Consignment 2,400 Advances 37,44
Sales 48,00 from 0
Revenue.. 0
Consignee…… 3,360
7. To record cost of
goods sold and Cost of goods 31,50
related costs. sold** 0
** (P60,000 + P600 Inventory on 31,50
+ Consignment 0
P2,400) x ½ =
P31,500
*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:
Problem II
1. The account sales:
Sold for the Account of:
AA Company
Sales (8 sets @ P24,000)……………… P
192,000
Charges:
Freight-in…………… P 6,000
Advertising expense………… 2,400
Deliveries and installation expenses 9,600
Repairs expense – on units sold.. 4,800
70,80
Commissions, 25% of sales 48,000 0
Due to Consignor……………………………. P121,200
Less: Advances………………. 0
Balance………………………… P121,200
Remittance Enclosed……………… 30,000
Balance Due…………… P 91,200
Items on Hand………… 15 sets
Items Returned (defective)….……. 2 sets
Problem III
Summit Electronics Company
Inventory on Consignment (800 @ P570) 456,000
Finished Goods Inventory 456,000
Farley Hardware
No entry upon receipt of consigned merchandise.
2. a – P 370
Charges Related to
Total Consignment Inventory on
Charges Sales Consignment
(25) (8) (15)
Consignor’s charges:
Cost P2,500 P800 P1,500
Freight-out 75 30 45
Consignee’s charge - Commission __400__ __400__ _______
Total P2,975 1,230 _P1,545_
Sales price _1,600_
Consignment profit _P370_
5. c
Sales P15,000
Less Charges:
Commission P 2,250
Advertising 1,500
Delivery expense ___750 __4,500
Due to Consignor P10,500
Less: Advances
Value of note – sight draft: (100 beds x P600 per bed) x P36,000
60%
Multiplied by: Proportional number of beds sold 15/100 __5,400
Amount remitted P 5,100
6. d – P1,500
Sales P15,000
Less Charges:
Consignor’s charge:
Cost of beds (P600 per bed x 15 beds) 9,000
Consignee’s charges:
Commission P2,250
Advertising 1,500
Delivery expense ___750 __4,500
Consignment net income P1,500
x – 15%x = P27,200
85%x = P27,200
x = P32,000
8. c – P16,800
Sales (unknown) x
Less Charges:
Advertising P500
Delivery and installation 100
charges
Commission (unknown) 20%x _______
Remittance P 12,840
9. b- P6,080
Cost (P150 per unit x 40 units) P6,000
Freight on shipment (P200 x 40/100) 80
Cost of inventory on consignment P6,080
10. c - 6
Sales (unknown) x
Less Charges:
Commission (unknown) 20%x
Advertising P1,000
Delivery and installation 600
Cartage on consigned goods 500
Remittance P21,900
11. b – P2,300
Charges Related to
Total Consignment Inventory on
Charges Sales Consignment
(10) (6) (3)
Consignor’s charges:
Cost P30,000 P18,000 P9,000
Freight-out 2,500 1,750 750
Consignee’s charges:
Commission (20% x P30,000) 6,000 6,000
Advertising 1,000 1,000
Delivery and installation 600 600
Cartage __500__ __350__ __150__
Total P40,600 27,700 _P9,900_
Sales price _30,000_
Profit on Consignment __P2,300__
20. d – P140
Charges Related to
Total Consignment Inventory on
Charges Sales Consignment
(5) (4) (1
Consignor’s charges:
Cost P 775 P 620 P 155
Freight 50 40 10
Consignee’s charges:
Commission 200 200 ____
Total P1,025 P 860 P165
Sales price (4 units x P250/unit) _ 1,000
Profit on Consignment P 140
22. b
Collection made:
Cash sale (P1,500 x 2) P 3,000
Credit sale (P1,800 x 25%) ___450
Total P3,450
Less: Charges
Freight P 320
Commission [(P3,000 + P1,800) x 15%] __720 __1,040
Amount remitted P 2,410
23. a
Charges Related to
Total Consignment Inventory on
Charges Sales Consignment
(5) (3) (2)
Consignor’s charges:
Cost P4,000 P 2,400 P 1,600
Freight 200 120 80
Consignee’s charges:
Freight 320 192 128
Commission 720 720 ______
Total P5,240 P 3,432 P1,808
Sales price 4,800
Profit on Consignment P 1,368
24. b – P1,808 – refer to No. 20 for computation
25. d – 244,600
Sales on credit (14,000 per unit x 12 units) + (13,000 x 10) P298,000
Less: Sales allowance granted P 2,000
Bad debts 7,000
Commission [2% x (P298,000 – P2,000)] _44,400 __53,400
Amount still due from BB, Inc P
244,600
26. d – P67,280
Charges Related to
Total Consignment Inventory on
Charges Sales Consignment
(30) (22) (8)
Consignor’s charges:
Cost P240,000 P176,000 P64,000
Freight-out 1,800 1,320 480
Consignee’s charges:
Sales allowance 2,000 2,000
Bad debts 7,000 7,000
Commission
[15% x (P298,000 – P2,000)] 44,400 44,400
Total P295,200 P230,720 _P64,480_
Sales price [P14,000 per unit x 12
units) 298,000
+ (P13,000 per unit x 10 units)]
Consignment profit P 67,280
28. b – 395
Sales (unknown) x
Less Charges:
Commission (unknown)
(
__x__ P10 )
P100
Delivery expense __P45__ ________
Remittance P35,505
x – _P10x_ = P35,550
P100
P100x – P10x = P3,555,000
P90x = P3,555,000
x = P39,500
29. b
Consignmen
Regular Sales t Sales Total
Sales P120,000 P30,000 P150,000
Cost of sales 84,000 19,500* 103,500
Gross profit P 36,000 P10,500 P 46,500
Operating expenses:
Commission (P30,000 x 5%) P 1,500 P 1,500
Freight-in (P260 x 1,950 1,950
P19,500*/P26,000)
Others
Regular (P15,150 x 12,120
P19,500/P26,000)
Consignment
(P15,150 x P30,000/P150,000) _______ 3,030 3,030
Total P 12,120 P 4,725 _P16,845_
Net profit P 23,880 P 5,775 P29,655
*P26,000 – P6,500 = P19,500
Theories
31 d
.
32 d
.
33 a
.
34 c
.