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  • Assignment in Special Transaction

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    Elizabeth Canada
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    This document discusses various accounting topics including: 1. A consignment sale with revenue of $1,200,000, costs of $480,000 and $24,000, and commission of $240,000 resulting in a profit of $456,000. 2. Goods held on consignment resulted in a $43,000 reduction in inventory. 3. A franchise was purchased with a $20,000 down payment and an 80% note receivable of $60,747 for a total transaction price of $80,747.

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    This document discusses various accounting topics including: 1. A consignment sale with revenue of $1,200,000, costs of $480,000 and $24,000, and commission of $240,000 resulting in a profit of $456,000. 2. Goods held on consignment resulted in a $43,000 reduction in inventory. 3. A franchise was purchased with a $20,000 down payment and an 80% note receivable of $60,747 for a total transaction price of $80,747.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    4 views5 pages

    Assignment in Special Transaction

    Uploaded by

    Elizabeth Canada
    This document discusses various accounting topics including: 1. A consignment sale with revenue of $1,200,000, costs of $480,000 and $24,000, and commission of $240,000 resulting in a profit of $456,000. 2. Goods held on consignment resulted in a $43,000 reduction in inventory. 3. A franchise was purchased with a $20,000 down payment and an 80% note receivable of $60,747 for a total transaction price of $80,747.

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    © All Rights Reserved
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    CANADA, ELIZABETH SPECIAL TRANSACTION

    BSA-3 MS.CRISTINE ARIOLA,CPA

    Consignment

    Solutions:

    2. Revenue from Consignment Sale

    Revenue: 960,000/0.8 = 1,200,000

    Profit from Consignment Sale

    Revenue 1,200,000

    Less: Cost of Product 480,000

    Shipping Costs 24,000

    Commission 240,000

    Profit on Sale 456,000

    Answer :Letter B
    3. Goods held on Consignment by Opal 27,000

    40% markup on selling price 16,000 ( 40,000 x 40%)

    Total Reduction in Inventory 43,000

    Answer:Letter D

    Franchise

    4. Cash Down payment (100,000 x 20%) 20,000

    PV of Note receivable

    ( 100,000 x 80%) /4 x PV of ordinary annuity @ 12%, 304 60,747

    Transaction price 80,747

    Answer : Letter C
    7. Contract Revenue 80,747

    Years 4

    Contract Revenue for 20x2 20,187

    PV of Note receivable as of 20x2 60,747.00

    Interest Rate 12%

    Total Revenue 24,477

    Answer : Letter B
    Construction Contracts

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