ACTIVITY-CHAPTER 7

On January 1, 20x1, Pete Electrical Shop received from Marion Trading 300 pieces
of bread toasters. Pete was to sell these on consignment at 50% above cost, for a
15% commission on the selling price. After selling 200 pieces, Pete had the
remaining unsold units repaired for some electrical defects for which he spent
₱2,000. Marion subsequently increased the selling price of the remaining units to
₱330 per unit. On January 31, 20x1, Pete remitted ₱64,980 to Marion after
deducting the 15% commission, ₱850 for delivery expenses of sold units, and
₱2,000 for the repair or 100 units.
The consigned goods cost Marion Trading ₱200 per unit, and ₱900 had been paid to
ship them to Pete Electrical Shop. All expenses in connection with the consignment
were reimbursable to the consignee.

1. The consignment profit on the units sold was

a. 12,200 b. 12,880 c. 13,000 d. None of these
Ans. None of these
Solution:

Remitted P64,980
Unsold Units 2,000
Delivery Expenses 850
Total 67,830
Multiply by: 15%
Profit on the units sold P10,174.50

2. The value of inventory on consignment was

a. 8,120 b. 8,800 c. 8,920 d. None of these
Ans. None of these
Solution:

Per unit 330

Multiply by: 100
Total 33,000
Multiply by: 15%
Total 4,950
Add: 10,174.50
Value of inventory on consignment 15, 125.50