QUESTIONS OF PAST EXAM PAPERS RTP, MTP

1.
Consignment Account
` `

To Goods sent on consignment A/c 9,00000 By Consignee’s A/c-Sales 9,00,000

(30,000 kg x ` 30) (15000 kg x ` 60)

To Cash A/c 1,50,000 By Abnormal Loss A/c (Insurance

(Expenses 30,000 kg x ` 5) claim - WN) 18,000

To Consignee’s A/c: Advertisement & Add: Abnormal Loss (WN) (Profit 10,000 28,000
Recurring expenses 33,000 and Loss Account)
Commission @ 5% on ` 90,0000 45,000 By Consignment Stock A/c 4,93,380
To Profit and loss A/c (Profit on 2,93,380
Consignment) _______
14,21,380 14,21,380

Working Notes:
1. Abnormal Loss:
Cost of goods lost: 800 kg
Total cost (800 x ` 30) 24,000
Add: expenses incurred by the consignor @ ` 5 per kg 4,000
Gross Amount of abnormal loss 28,000
Less: Insurance claim (18,000)
Net abnormal loss 10,000
2. Valuation of Inventories

Quantity (Kgs) Amount (`)

Total Cost (30,000 kg x `30) 30,000 9,00,000

Add: Expenses incurred by the consignor 1,50,000
Less: Value of Abnormal Loss – 800 kgs (WN 1) (800) (28,000)
29,200 10,22,000
Less: Normal Loss (200)
29,000 10,22,000
Less: Quantity of Sampoo sold (15,000)
Quantity of Closing Stock 14,000
Value of 14,000 kgs – (10,22,000/29,000) x 14,000 4,93,380

1
2.
In the books of Mr. Sam
Consignment Account

Date Particulars ` Date Particulars `

2021 2021

Jan. 1 To Goods sent on Jan. 1 By Goods sent on Consignment

Consignment A/c A/c (Loading)

(Invoice price) 7,50,000 ` (7,50,000 – 5,00,000) 2,50,000

To Bank A/c – Mar.31 By Alex – Sales Stock on 6,00,000

Consignor’s 50,000 By Consignment A/c
Expenses

Mar.31 To Alex – Expenses 15,000 1/5 × ` (7,50,000 + 1,63,000

– Commission* 50,000 + 15,000)

(0.05 × ` 6,00,000) 30,000

Mar.31 To Stock Reserve A/c

(` 2,50,000 × 1/5) 50,000

To Profit on
Consignment A/c
(transferred to Profit
and Loss A/c)

1,18,000 _______

10,13,000 10,13,000

*Invoice price of goods sold: = 4/5 of ` 7,50,000 = ` 6,00,000.

The goods were sold for ` 6,00,000 and hence there was no surplus price. Therefore, extra commission @ 20% will
not be given to Mr. Alex.
Alex’s Account

Particulars Amount` Particulars ` Amount`

To Consignment A/c – By Consignment A/c:

Sales 6,00,000 Expenses 15,000

Commission 30,000 45,000

By Bills Receivable A/c 5,00,000

By Bank A/c (Balancing figure)

55,000

6,00,000 6,00,000

2
3.
Consignment to Mumbai Account in the Books of Shikha
Particulars ` Particulars `

To Goods sent on Consignment A/c 5,62,500 By Goods sent Consignment A/c on 1,12,500
(loading) By Abnormal Loss
To Cash A/c 45,000 By Reema(Sales) 49,500
To Reema(Expenses) 36,000 4,50,000
To Reema(Commission) 49,219 By Inventories on Consignment A/c 91,125
By General Profit & Loss A/c
To Inventories Reserve A/c 16,875 6,469

7,09,594 7,09,594
Working Notes:
1. Calculation of value of goods sent on consignment:
Abnormal Loss at Invoice price = ` 56,250
Abnormal Loss as a percentage of total consignment = 10%.
Hence the value of goods sent on consignment = ` 56,250 X 100/ 10 = ` 5,62,500 Loading of goods sent on
consignment = ` 5,62,500 X 25/125 = ` 1,12,500
2. Calculation of abnormal loss (10%): Abnormal Loss at Invoice price = ` 56,250.
Abnormal Loss at cost = ` 56,250 X 100/125 = ` 45,000
Add: Proportionate expenses of Shikha (10 % of ` 45,000) = ` 4,500
` 49,500
3. Calculation of closing Inventories (15%):
Shikha’s Basic Invoice price of consignment = ` 5,62,500
Shikha’s expenses on consignment = ` 45,000
` 6,07,500
Value of closing Inventories = 15% of ` 6,07,500 = ` 91,125
Loading in closing Inventories = ` 1,12,500 x 15/100 = ` 16,875
Where ` 84,375 (15% of ` 5,62,500) is the basic invoice price of the goods sent on consignment remaining
unsold.
4. Calculation of commission:
Invoice price of the goods sold= 75% of ` 5,62,500 = ` 4,21875
Excess of selling price over invoice price = ` 28,125 ( ` 4,50,000 - ` 4,21,875)
Total commission = 10% of ` 4,21,875 + 25% of ` 28,125
= ` 42187.5 + ` 7,031.25 = ` 49218.75

3
4.
In the Books of Mr. Divik
Consignment A/c
` `
To Goods sent on 18,00,000 By Manoj’s A/c – Sales 15,62,500
Consignment A/c (2500 × ` 625)
(3,000 × ` 600)
To Bank A/c – Packing, Freight charges 30,000 By Goods sent on Consignment A/c 3,00,000
To Manoj’s A/c – Selling expenses 10,000 (3000 × ` 100)
To Manoj’s Account – By Consignment stock account 3,05,000
Commission
5% on ` 15,62,500= 78,125 (Refer working note)
20% on ` 62,500= 12,500 90,625
To Stock reserve A/c (500 × ` 100) 50,000
To Profit and Loss account 1,86,875

21,67,500 21,67,500

In the Book of Mr. Manoj Mr. Divik’s Account

` `
To Bank – Selling expense 10,000 By Sales 15,62,500
To Commission 90,625
To Bank 5,00,000
To Balance c/d 9,61,875

15,62,500 15,62,500

Working Note:
Closing Stock valuation:
`
Cost price of 500 sarees (500 × 600) 3,00,000
Add: Proportionate expenses (30,000 × 500/3,000) 5,000
3,05,000

4
5.
In the books of A
Consignment Account
Dr. Amount Cr.
Amount
2020 ` 2020 `
Feb. 18 To Goods sent on 1,00,000 March 15 By B’s account (Sales)
consignment account (600 × ` 160) 96,000

Feb. 18 To Cash/Bank account 1,500 May 20 By B’s account 51,000

(Expenses) (Sales)
(300 × ` 170)
Feb. 18 To B’s account June 30 By Consignment Stock

(Clearance charges) 3,000 (Working note 2) 10,450

June 30 To B’s account:
Selling expenses
(900 × ` 20) 18,000
Commission (Working 24,900
note 1)
June 30

To Profit and loss account

(profit on consignment
transferred)
10,050
1,57,450

1,57,450

B’s Account
Dr. Cr.
Amount Amount
2020 ` 2020 `
March 15 To Consignment Feb 18 By Consignment account
account 96,000 (Clearance charges) 3,000
(Sales)
May 20 To Consignment June 30 By Consignment account:
account
(Sales) 51,000 Selling expenses 18,000
Commission 24,900
June 30 By Cash/Bank account
______ 1,01,100
1,47,000 1,47,000

5
Working Notes:
1. Calculation of total commission:
Let total commission be x
1
x = 900 × Rs. 25 + [` 96,000 + ` 51,000) – x – (900 × ` 125) ]
4
1
x= [` 1,47,000 – x - ` 1,12,500]
4
1
x = ` 22,500 + [` 34,500 – x]
4

4x + x = ` 90,000 + ` 34,500
5x = ` 1,24,500
x = ` 24,900
2. Valuation of consignment stock: `
100 DVD players @ ` 100 each 10,000
(𝑅𝑠. 1,500×100) 150
Add: Proportionate expenses of A
1,000

(𝑅𝑠. 3,000×100)
Proportionate expenses paid by B
1,000
300
10,450

6.
In the books of Ganpath
Consignment to Rawat of Jaipur Account
Particulars ` Particulars `
To Goods sent on Consignment 7,50,000 By Rawat (Sales) 7,35,000
To Bank (Expenses: 15,000+45,000+15,000) 75,000 By Goods lost in Transit 50 cases @ ` 82,500
1,650 each (WN1)
To Rawat (Expenses: 50,000 By Consignment Inventories:
18,000+25,000+7,000) In hand 50 @ ` 1,695 each (WN2) 84,750

To Rawat (Commission) 73,500 By Consignment Inventories:

To Profit on Consignment ts/f to Profit 36,250 In transit 50 @ ` 1,650 each (WN3)
& Loss A/c 82,500
9,84,750 9,84,750
Rawat’s Account

Particulars ` Particulars `
To Consignment to Jaipur A/c 7,35,000 By Consignment A/c (Expenses) 50,000

By Consignment A/c (Commission) 73,500

By Balance c/d 6,11,500

7,35,000 7,35,000

6
Working Notes:
1. Consignor’s expenses on 500 cases amounts to ` 75,000; it comes to ` 150 per case. The cost of cases lost will
be computed at ` 1,650 per case i.e. 1,500+150.
2. Rawat has incurred ` 18,000 on clearing 400 cases, i.e., ` 45 per case; while valuing closing inventories with the
agent ` 45 per case has been added to cases in hand with the agent i.e. 1,500+150+45.
3. The goods in transit (50 cases) have not yet been cleared. Hence the proportionate clearing charges on those
goods have not been included in their value i.e. 1,500+150 =1,650.
4. It has been assumed that balance of ` 6,11,500 is not yet paid.

7.
Journal Entries in the books of Consignor
` `

1 Open Consignment Account and debit it with the cost goof ods and
credit it with “Goods sent on Consignment Account”.
1/7/2019 Consignment to Wye A/c Dr. 50,000
To Goods Sent on Consignment A/c 50,000
2 For the expenses incurred by the consignodre,bit Consignment Account
and credit cash or Bank, as the case may be.
1/7/2019 Consignment to Wye A/c To Dr. 1,000
Bank A/c
1,000
3 If the consignee sends an advance, debit Ca(sohr Bank) or Bills
Receivable and credit the consignee’s personal account
3/7/2019 Bills Receivable A/c To Wye Dr. 30,000
(Note: Wye’s account has appeared only now, in the previous two
entries his account did not figure since he is not personally involved) 30,000
4 Wye’s acceptance will mature on 6/10/2019
Assuming it was met, the entry will be:
6/10/2019 Bank A/c Dr. 30,000
To Bills Receivable A/c 30,000
(Note: If such bill is discounted by consignor with the bank before
maturity, pass usual entry for discounting a bill. The discount on
bills may either be treated as consignment expenses and
charged to Consignment A/c or it may be treated as general
financial charges and charged to Profit & Loss Account)
5 On receipt of Account sale
(a) For sales made by the consignee, debit his personal
31/12/2019
account and credit Consignment Account
Wye
To Consignment to Wye A/c Dr.
(b) For expenses incurred by the consignee as well as bad debts
suffered by him on behalf of the consignor, debit
Consignment Account and credit Consignee Account
31/12/2019 Consignment to Wye A/c (2,000+500+300+600) Dr.
To Wye

7
 (c) For commission due to the consignee, debit Consignment
Account and credit the consignee.
31/12/2019 Consignment to Wye A/c(10% on ` Dr.
55,000) To Wye
(d) For the remittance that may accompany the Account Sales,
debit Bank and credit the consignee.
Bank A/c
To Wye Dr.

6 For the goods that may remain unsold debit the Consignment
Stock Account and credit Consignment Account.
31/12/2019 Inventories on Consignment A/c
To Consignment to Wye A/c
Note: (i) Cost of Inventories
1/5 of Cost to consignor ` 10,000
1/5 of expense incurred by the consignor ` 200
1/5 of freight (direct exp. Of consignee) ` 400
` 10,600
(ii) Inventories on Consignment Account is an asset; it will be shown in
the balance sheet of the consignor and next year it will be
transferred to the debit of the Consignment Account.
7 At this stage the Consignment Account will reveal profit or loss (see the
account given below). The profit or loss will be transferred to the Profit
and Loss Account of the consignor by debit to the Consignment Account.
31/12/2019 Consignment to Wye A/c Dr. 5,700
To Profit and Loss A/c 5,700
8 The Goods sent on Consignment Account should be closed by transfer
to the Trading Account debit the former and credit the latter:
31/12/2019 Goods sent on Consignment Account Dr. 50,000
To Trading Account 50,000

Important Ledger Accounts

Consignment to Wye Account
2019 Particulars ` 2019 Particulars `

1-Jul To Goods sent on Dec. 31 By Wye-sale

Consignment A/c 50,000 Proceeds 55,000
1-Jul To Bank(expenses) 1,000 Dec. 31 By Inventories on
Dec. 31 To Wye-expenses Consignment 10,600
& bad debt 3,400 Account
Dec. 31 To Wye-commission 5,500
Dec. 31 To P&L Account-transfer of profit 5,700
65,600 65,600
Goods sent on consignment account
2019 Particulars ` 2019 Particulars `

Dec. 31 To Trading A/c 50,000 July 1 By Consignment to Wye 50,000

A/c

8
 Inventories on Consignment account
2019 Particulars ` 2019 Particulars `

Dec. 31 To Consignment to Wye A/c 10,600 Dec. 31 By Balance c/d 10,600

2020
Jan. 1 To Balance b/d 10,600

Wye’s account
2019 ` 2019 `

Dec. 31 To Consignment 3-Jul By Bills Receivable

Wye A/c 55,000 Account 30,000
By Consignment to
Wye A/c –
Expenses & bad debt 3,400
Commission 5,500
By Bank
(balance received) 16,100
55,000 55,000

8.
In the books of M/s Rosie & Co
Dr. Consignment to Sahoo Account Cr
Particulars ` Particulars `

To Goods sent on Consignment A/c 1,50,000 By Sahoo- sale Proceeds 1,76,000

To Bank(expenses) 11,500 By Abnormal loss Ac (loss by fire) 16,150
Freight 10,000
Insurance 1,500
To Sahoo-expenses 26,300 By Inventories on consignment 17,750
Customs duty 14,400
Sundry expenses 2,000
Commission (5%) 8,800
Bad debt (220*5) 1,100
To P&L Account-transfer of profit 22,100
2,09,900 2,09,900

Dr. Goods sent on consignment account Cr

Particulars ` Particulars `

To Trading A/c 1,50,000 By Consignment to Sahoo A/c 1,50,000

1,50,000 1,50,000

9
Dr. Inventories on Consignment account Cr
Particulars ` Particulars `

To Consignment to Wye A/c 17,750 By Balance c/d 17,750

17,750 17,750
Dr. Sahoo’s account Cr
Particulars ` Particulars `

To Consignment to Sahoo A/c 1,76,000 By bank (bank draft as advance) 50,000

By consignment to Sahoo A/c
Customs duty 14,400
Sundry expenses 2,000
Commission 8,800
Bad debts 1,100 26,300
By balance amount remitted 99,700
1,76,000 1,76,000
Working notes :

(a) Computation of the abnormal loss1-00 toys

a. Cost of 100 toys 100 x 150 15000
b. Freight charges- 100 toys 10000/1000 x 100 1000
c. Insurance- 100 toys 1500/1000 x 100 150

a. Abnormal loss 16,150

(b) Computation of the Closing sto-c(k1000-100-800)

a. Cost of 100 toys 100 x 150 15000

b. Freight charges- 100 toys 10000/1000 x 100 1000

c. Insurance- 100 toys 1500/1000 x 100 150

d. Customs duty-100 toys 14400/900 x 100 1600

Closing stock 17,750

10
9.
In the books of M/s Nike sports Co.
Dr. Consignment to Adidas Co. Account Cr
Particulars ` Particulars `

To Goods sent on Consignment A/c To 2,00,000 By goods sent on consignment 50,000

Bank (expenses) 11,500 By Adidas Co- sale Proceeds 1,76,000
Freight 10,000
Insurance 1,500
To Adidas Co.-expenses 15,530 By Abnormal loss Ac (loss in transit) 16,150
Octroi duty 1,530
Go-down rent 2,000
Commission (WN) 12,000 To
Reserve on closing stock By Inventories on consignment
5,000 21,320
To P&L Account-transfer of profit
31,440
2,63,470 2,63,470
Dr. Adidas Co. account Cr
Particulars ` Particulars `

To Consignment to Adidas A/c 1,76,000 By bank (bank draft as advance) By 50,000

consignment to Adidas A/c
Octroi duty 1,530
Go-down rent 2,000 15,530
Commission (WN) 12,000
By balance amount remitted 1,10,470
1,76,000 1,76,000
Working notes :
(a) Computation of the abnormal loss1-0 shoes
a. Cost of 100 shoes 10 x 1500 15000
b. Freight charges- 100 shoes 10000/100 x 10 1000
c. Insurance- 100 shoes 1500/100 x 10 150
Abnormal loss 16,150
(b) Computation of the Closing sto-c(k100-10-80)
a. Invoice price of 10 shoes 10 x 2000 20,000
b. Freight charges- 10 shoes 10000/100 x 10 1000
c. Insurance- 10 shoes 1500/100 x 10 150
d. Octroi duty-10 shoes 1530/90 x 10 170
Closing stock 21,320
(c) Stock reserve on the goods sent on consignment= 100 shoes x 500 (2000-1500) = 50,000
(d) Stock reserve on the closing stock of consigned goods= 10 shoes x 500 (2000-1500) = 5000
(e) Computation of over-riding commission payable to Adidas
Co. Sales at invoice price= 80 x 2000 = 1,60,000
Commission at 5% on the above= 5% x 1,60,000 = 8000
Surplus over the invoice price= 2200-2000 = ` 200
Commission of 25% over the surplus= 200 x 80 = 16000 x 25% = 4000
Total commission = Normal + surplus commission = 8000+4000 =
12,000

11
10.
In the books of Miss Rakhi
Consignment Account
Particulars ` Particulars `
To Goods sent on By Miss Geeta 9,00,000
Consignment A/c 9,00,000 By Insurance Co. 35,000
By Profit & Loss A/c
To Cash abnormal loss(net) 10,545
Freight 7,650 By Consignment
Insurance 3,250 10,900 Inventories 1,84,391
To Miss Geeta
Carriage 10,500
Repairs 2,500
Commission 54,000 67,000
To Profit & Loss A/c 1,52,036
11,29,936 11,29,936
Miss Geeta’s Account
Particulars ` Particulars ` `
To Consignment A/c 9,00,000 By Consignment A/c
(Sales) Expenses:
Carriage 10,500
Repairs 2,500
Commission 54,000 67,000
By Bank(bal. fig.) 8,33,000
9,00,000 9,00,000
Note: It is assumed that the agent has remitted the amount due from her.
Working Notes:
1. Abnormal loss :
Cost to the consignor: 50 sets @ ` 900 45,000
Add: Proportionate expenses incurred by the consignor
50 ×10,900
1,000
545
Gross abnormal loss 45,545
Less: Insurance claim (35,000)
Net abnormal loss 10,545
2. Valuation of Inventories
200 sets @ ` 900 1,80,000
Add: Proportionate expenses of the consignor 2,180
Add: Carriage paid by the consignee 2,211
1,84,391

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11.
Vikram Milk Foods Co. Ltd.
Consignment to Sonepuri Account
Particulars ` Particulars `
To Goods sent on By Sunder Stores
Consignment A/c
2,000 1 kg. tins @ ` 10 20,000 1,500 1 kg. tins @ ` 15 22,500
6,000 1/2 kg. pkts. @ ` 6 36,000 56,000 4,000 1/2 kg. pkts. @ ` 7 28,000 50,500
To Sunder Stores: By Insurance - Claim 450
Freight 1,440 By Profit & Loss A/c -
Rent and insurance 600 abnormal loss(Net) 65
Commission 2,525 4,565 By Inventory on consignment 16,915
A/c
To Profit & Loss A/c – Profit 7,365

67,930 67,930

Sunder Stores, Sonepuri

Particulars ` Particulars `
To Consignment to Sonepuri 50,500 By Consignment to Sonepuri 1,440
Account - Sales Proceeds Account - Freight 600
Rent & Insurance 2,525
Commission 45,935
By Bank(Bal. fig)

50,500 50,500

Working Notes:
(i) Sale value of total consignment:
2,000 1 kg. tins @ ` 15 30,000
6,000 1/2 kg. pkts. @ ` 7 42,000
72,000
(ii) Freight @ 2% of above 1,440
(iii) Inventories at the end:
450 1 kg. tins @ ` 10 (Selling Price ` 6,750) 4,500
2,000 1/2 kg. pkts. @ ` 6 (Selling Price ` 14,000) 12,000
16,500
Add: Freight 2% of (Selling Price ` 20,750) 415
16,915
(iv) Loss in transit:
Cost of 50 1 kg. tins @ ` 10 500
Freight @ 2% of Selling Price ` 750 15
Gross abnormal Loss 515
Less :Claim (450)
Net abnormal Loss 65

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12.
In the books of Mr. X Consignment Account
Particulars Amount ` Particulars Amount `
To Goods sent on
Consignment Account 1,50,000 By Y’s account: (Sales) 1,60,000
To Bank account: Freight and 5,500 By Goods sent on consignment 50,000
packing etc. (Cancellation of loading)
To Y’s account: By Inventories on consignment (W.N.2) 28,990
Selling expenses 2,000
Commission (W.N.1) 16,000
To Inventories Reserve (W.N.3) 10,000
To Profit and loss account (profit 55,490
on consignment transferred)
2,38,990 2,38,990

Trading and Profit and Loss Account for the year ended……..
Particulars Amount ` Particulars Amount `
To Purchases 2,00,000 By Sales 90,000
To Gross profit c/d 26,000 By Goods sent on consignment 1,00,000
By Inventories in hand Cost ` 40,000
Less: 10% 4,000 36,000
2,26,000 2,26,000
To Expenses and commission 3,000 By Gross profit b/d 26,000
To Net profit 78,490 By Consignment A/c
(profit on consignment) 55,490
81,490 81,490
Working Notes:
i. Calculation of commission payable to Y: `
Total sale proceeds of Y 1,60,000
Surplus proceeds realised over ` 30 per metre
[4,000 x ` (40-30)] 40,000
Commission:
5% of total sale proceeds (5% of ` 1,60,000) 8,000

20% of surplus (20% of ` 40,000)

8,000
16,000
ii. Inventories on Consignment: `

Cost of consignment Inventories (1000 mtrs@ ` 30) 30,000

Add: Expenses of consignor (5,500X1/5) 1,100
31,100

Less: Reduction of 10% in cost due to fall in market price (20,000+1,100) x 10% 2,110
28,990

iii. Loading (`10 x 1,000 mtrs) 10,000

14
13.
D’s Account
2020 ` 2020 `

Feb. 1 To Bills payable A/c (80% 6,40,000 Mar. 31 By Cash/Bank A/c (820x `930) 7,62,600
of ` 8,00,000)

Mar. 31 To Cash A/c (expenses) 12,500

To Commission earned A/c 70,520
To Bank A/c 39,580
7,62,600 7,62,600

Bills Payable Account

2020 ` 2020 `

Mar. 5 To Cash/Bank A/c 6,40,000 Feb. 1 By D’s A/c 6,40,000

6,40,000 6,40,000

Value of closing inventory with A

`

160 cycles at ` 640 (cost price including freight) 1,02,400

20 cycles (shop-spoiled) at 50% of the cost i.e. at ` 320 each 6,400
Value of closing inventory with A i.e. the amount (net effect of the loading) at which D will account for
in his books on 31st March, 2020
1,08,800

Working Note:
1. Calculation of commission:
`

7.5 % on the invoice price amount (820x ` 800) i.e. ` 6,56,000 49,200
20% on the surplus price amount (820 x ` 130) ` 1,06,600 21,320

70,520

2.
`
Abnormal loss:
Cost of packet lost during transit 900
Add: Expenses incurred by Y 100
Gross Abnormal loss 1,000
Less: Insurance claim received (570)
Net Abnormal loss 430

15
3. Cost of inventories at the end:
`

59 packets @ ` 900 53,100

Add: Expenses incurred by Y (59x `100) 5,900
Add: Proportionate (non-recurring) expenses incurred by the consignee
(59/799x `39,950) 2,950

61,950

4.
Closing inventories No. of packets

Packets consigned 800

Less: Packet lost in transit (1)
799
Less: Packets sold 740
59

14.
Consignment Account
` `

To Goods sent on consignment A/c 7,20,000 By Consignee’s A/c-Sales 8,88,000

(800 x ` 900) (740 x100x ` 12)
To Cash A/c 80,000
(expenses 800 x `100) By Abnormal Loss Cash A/c 570
(insurance claim)
To Consignee’s A/c: By Profit and loss account 430
Recurring expenses 22,500 (abnormal loss)
Non-recurring expenses 39,950 By Consignment stock A/c 61,950
Commission @ 2% on ` 8,88,000 17,760
Del-credere commission @ 1% on 8,880
` 8,88,000
To Profit and loss A/c 61,860
(profit on consignment)
9,50,950 9,50,950

16
15.
In the books of Mr. A
Consignment of Mumbai Account
2019 ` 2019 `
March 1 To Goods sent on consignment A/c To 1,00,000 Dec. 31 By B’s A/cs 1,50,000
Cash A/c (freight and insurance) To B’s 12,000
A/c:
Clearance expenses 3,000
Selling expenses 2,000 Commission
@ 5% on ` 1,50,000 = 7,500
Del-credere commission @3% on
` 1,50,000 = 4,500
To Provision for expenses (bank
charges)
17,000
To Profit and loss A/c (profit on
consignment)
Dec. 31 260

20,740

1,50,000 1,50,000
B’s Account

2019 ` 2019 `

Dec. 31 To Consignment A/c 1,50,000 Dec. 31 By Consignment A/c-

Clearance expenses 3,000

Selling expenses 2,000

Commission 7,500

Del-credere commission 4,500 17,000

By Balance c/d 1,33,000

1,50,000 1,50,000

2020 2020
Jan. 1 1,33,000 Jan. 5 By Bank A/c 1,33,000
To Balance b/d

Bank Account
2020 ` 2020 `
Jan. 5 To B’s account 1,33,000 Jan. 5 By Bank charges 260
Jan. 5 By Balance c/d 1,32,740
1,33,000 1,33,000

Provision for Expenses Account

2020 ` 2020 `
Jan. 5 To Bank charges 260 Jan. 1 By Balance b/d 260
260 260

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16.
Books of Max Chemical Works
Consignment to Raja Medical Store Account
Particulars ` ` Particulars `
To Goods sent on Consignment 1,68,000 By Goods sent on 28,000
A/c (700 box) Consignment A/c (loading)
To To Cash A/c 14,000 By Abnormal Loss (50 box) 11,000

To Raja Medial Store - By Raja medical store 1,60,000

Carriage Expenses on 650 box 9,750 (Sales- 500 box)

Selling exp 6,000

To Commission 9,600 By Inventories on 41,250
Consignment A/c
To Inventories Reserve A/c 6,000

To General Profit & Loss A/c 26,900

2,40,250 2,40,250
Working Notes:
1. Calculation of value of goods sent on consignment
Value of goods sent on consignment = 1,68,000
Loading of goods sent on consignment 1,68,000 X 20 / 120 =28,000
2. Calculation of abnormal loss (50 boxes in transit): Abnormal Loss
paid by transporter = ` 22,000.
Abnormal Loss at Invoice price = ` 1,68,000 / 700 * 50 = ` 12,000
Abnormal Loss at cost = 12,000/120*100 = ` 10,000
Add: Proportionate expenses of Max chemical works (` 14,000/700X50) = ` 1,000
` 11,000
3. Calculation of closing Inventories (700-50-500 boxes = 150 box): Invoice price per
box =1,68,000 / 700= `240
Max chemical works Basic Invoice price of consignment (150 x240) 36,000
Add: consigner expenses 14,000/700X 150 3000
Add: consignee expenses 9,750/650X150 2,250
Closing Inventory 41,250
Loading in closing Inventories = `28,000 / 700 x 150 = `6,000
Where `36,000 (150/700 of ` 1,68,000) is the basic invoice price of the goods sent on consignment
remaining unsold.
Note :
1. In the above solution, abnormal loss has been shown at the full amount of cost ` 11,000 without
considering the amount of ` 22,000 received from transporter. Otherwise, there would have been gain
of ` 11,000 (Money received from transporter ` 22,000 less cost of boxes lost ` 11,000)
2. Consignment account given above has been prepared at the loaded price. The alternative way of
preparing the consignment account at cost is also possible.

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