College of Accounting Education

3/F F. Facundo Hall, B & E Bldg.

Matina, Davao City Philippines
Phone No.: (082) 305-0645

BRIDGING INSTRUCTION PROGRAM

ACP 311
Week 6-7
Consignment

1. On November 5, 2020, The Western Appliance Center ships five (5) of its appliances to the ABC
Store on consignment. Each unit is to be sold at P25,000 payable P5,000 in the month of
purchase and P1,000 per month thereafter. The consignee is to be entitled to 20% of all
amounts collected on consignment sales. ABC store sells three (3) appliances in November and
one (1) on December. Regular monthly collections are made by the consignee, and appropriate
cash remittances are made to the consignor at the end of each month. The cost of the
appliances shipped by the consignor was P15,500 per unit. The consignor paid shipping costs to
the consignee totalling P5,000.

The cost of inventory on consignment on December 31, 2020 is:

A. P15,500
B. P16,500
C. P19,600
D. P24,500

2. Using the same information in No. 1 the profit on consignment for 2020 is:

A. P29,400
B. P15,500
C. P15,000
D. P14,000

3. Using the same information in No. 1, the total amount remitted to consignor for the year 2020
is:

A. P23,000
B. P18,400
C. P12,000
D. 6,400
 College of Accounting Education
3/F F. Facundo Hall, B & E Bldg.
Matina, Davao City Philippines
Phone No.: (082) 305-0645

Installment Sales

4. Donna Company began operations on January 1, 2019 and appropriately uses the installment
sales method of accounting. The following data are available for 2019 and 2020:

2019 2020
Installment Sales P1,500,000 P1,800,000
Gross Profit on sales 30% 40%
Cash Collection from:
2019 sales 500,000 600,000
2020 sales - 700,000

The realized gross profit for 2020 is:

A. P720,000
B. P520,000
C. P460,000
D. P280,000

5. Eugene Corp., which began business on January 1, 2020, appropriately uses the installment sales
method of accounting for income tax reporting purposes. The following data are available for
2020:

Installment accounts receivable, 12/31/20 P200,000

Installment sales for 2020 350,000
Gross Profit on sales 40%
College of Accounting Education
3/F F. Facundo Hall, B & E Bldg.
Matina, Davao City Philippines
Phone No.: (082) 305-0645