ACCOUNTING FOR CONSIGNMENTS

Q.1 Vimal Mills Ltd. sent 100 pieces of suiting to Lal Garments House of Delhi on
consignment basis. The consignees are entitled to receive 5 per cent commission
plus expenses. The cost of Vimal Mills Ltd. is Rs. 200 per suiting. Lal Garments
House pays following expenses :
Railway Freight Rs. 500
Godown Rent & Insurance Rs. 1,000
Vimal Mills Ltd. draw on the consignees a bill for Rs. 10,000 which is duly
accepted. Subsequently it is discounted for Rs. 9,500. The consignees informed the
consignor of the sale of the entire consignment for Rs. 28,500. Show journal
entries and ledger accounts in the book of the consignor. [ PROFIT 5575 ]

Q.2 B. Ghosh of Bombay sent on consignment to Alok of Calcutta 300 cases @

Rs. 125 on 1st July 2006 to be sold on his account and at his risk for 10%
commission B. Ghosh incurred Rs. 3,000 expenses on dispatching the goods to
Alok. On July 10, 2006 B. Ghosh received a bill for Rs. 20,000 at 2 months from
Alok. On September 30, 2006 Alok sent on account sales disclosing that 200 cases
have been sold for Rs. 160/- each and the remaining cases @ Rs. 150/- each. The
account sales also discloses that Alok has incurred unloading expenses Rs. 600 and
selling expenses Rs. 900. He sends a draft for
the net amount due.
You are required to :
(a) Prepare the account sales; and
(b) Enter the transactions in the books of both the parties. [ PROFIT 300 ]

Q.3 Suresh and Co. of Bombay sent on consignment to Mahesh & Co. of Delhi 60
cases cutlery goods costing Rs. 175 per case. Expenses incurred by the consignor
at Bombay were :
Freight Rs. 275, insurance Rs. 55 and loading charges Rs. 20.
Suresh & Co. draw on Mahesh & Co. 2 months bills at sight for Rs. 7,000 which
the latter accepts. The charges paid by Mahesh & Co. at Delhi were unloading Rs.
30, Storage Rs. 85, insurance Rs. 15, Commission is payable to Mahesh & Co. at
2% on all sales in addition to 1½% del credere commission.
The consignee sells for prompt cash 30 cases @ Rs. 225 per case; 25 cases @ Rs.
250 per case and the balance @ Rs. 280 per case. The account was settled
immediately by means of a bank draft.
Write up the transactions and ledger acconts in the books of both the parties. [
PROFIT 2916 ]

Q.4 X of Calcutta sent on 15th January, 2006, a consignment of 500 toys bicycles
costing Rs. 100 each. Expenses of Rs. 700 met by the consignor. Y of Bombay
spent Rs. 1,500 for clearance and the selling expenses were Rs. 10 per bicycle.
Y sold, on 4th April 2006, 300 pieces @ Rs. 160 per piece and again on 20th June
1999, 150 pieces @ Rs. 172.
Y was entitled to a commission of Rs. 25 per piece sold plus one fourth of the
amount by which the gross proceeds less total commission thereon exceeded a sum
calculated at the rate of Rs. 125 per piece sold. Y sent the amount due to X on 30th
June 2006.
You are required to show the Consignment Account and Y’s Account in the books
of X.
[ PROFIT 9810 ]

Q.5 B. Ltd. of Delhi consigned 1,000 cases of milk powder to S. of Bombay. The
goods were charged at proforma invoice value of Rs 10,000 including a profit of
25% on invoice price. The consignors paid Rs. 600 for freight and insurance.
Consignee paid import duty Rs. 1,000, Dock Dues Rs. 200 and sent to the
Consignors a bank draft of Rs. 4,000 as advance. They sold 80 cases for Rs. 10,500
and sent for the balance due to the consignors after deducting commission of 5%
on gross sale proceeds. Show ledger accounts in the books of the consignor. [
PROFIT 2535 ]

Q.6 Mr. Datta Consigned to hatt 10,000 kgs of flour, costing Rs.33,000. He spent
Rs.550 as forwarding charges. 12% of the Consignment was lost in weighing and
handling. Mr. Bhatta sold 8,200 kgs. of flour at Rs.6 per kg, his selling expenses
being Rs.3,300 and Commission 5% on sales. Prepare the Consignment Account. [
PROFIT 11870 ]

Q.7 Philips Radio of Calcutta despatched 1,000 transistors at Rs.700 each to

Mohan Bros. of Delhi, the consignors paid freight Rs.7,500, cartage Rs.500 and
insurance Rs.2,500 Mohan Bros. received only 900 sets and incurred he following
expenses.

Rs.
Octroi and other Expenses 1,00,000
Cartage 5,000
Sales expenses 6,000
The consignee sold 600 sets only. You are required to calculate the value of
closing stock. [ 248150 ]

Q.8 S of Bombay consigned 10,000 kg. of oil to D of Calcutta. The cost of oil was
Rs.2 per kg. S paid Rs.5,000 as freight and insurance. During transit 250 kg were
accidentally destroyed for which the insurers paid directly to the consignors Rs.450
if full settlement of the claim.
D reported that 7,500 kg were sold @ Rs.3 per kg. The expenses being on godown
rent Rs. 200 on advertisement Rs.1,000 and on salesman salary Rs.2,000 D. is
entitled to a commission of 3% plus 1.5% del credere. D reported a loss of 100 kg.
due to leakage. D. settled the accounts by bank draft. Prepare the accounts is the
books of S. [ LOSS 657 ]

Q.9 A company sends 300 bales of cotton to its consignee at profit 20% on sale.
The cost of each bale to company is Rs.600 per bale. The following are the
expenses incurred in connection with this consignment :
(a) Rs.900 paid by the consignor for despatching goods.

(b) Rs.2,000 paid by the consignee by way of freight, duty and landing charges.

(c) Rs.1,000 paid by the consignee by way of godown rent, salaries of salesman.

Required :
The Valuation of stock at the end (at invoice price) if the consignee sells away
2/3rd of the consignment. [ 75,967 ]

Q.10 Deepak sold goods on behalf of Geep Sales Corporation on consignment

basis. On 1 January 2002 he had with him a stock of Rs.20,000 on consignment.
During the year he received goods worth Rs.2,00,000.
Deepak had instructions to sell goods at cost plus 25% and was entitled to a
commission of 4% on sales in addition to 1% del credere commission.
During the year ended 31 December 2002 cash sales were Rs.1,20,000; credit sales
Rs.1,05,000; Deepak’s expenses relating to consignment Rs.3,000 being salaries
and insurance bad debts amounted to Rs.3,000.
Prepare necessary accounts in the books of Geep Sales Corporation. [ 30750 ]

Q.11 Messrs. Sundar & Company consigned 1,000 tins of Ghee costing Rs.60 per
tin to their agents, Bansal Stores, at Calcutta. The agents sold 400 tins at Rs.80 per
tin for cash, 400 tins at Rs.82 per tin on credit and they took over the balance to
their own stock at Rs.82 per tin. Messrs. Sundar & Company paid freight and
carraige Rs.500 and miscellaneous expenses Rs.200. They drew on Bansal Stores
at 3 Months for Rs.45,000, which was duly accepted by the later. The expenses
incurred by the Bansal Stores were :

Carriage Rs.50
Octroi Rs.40
Storage Rs.110
Miscellaneous Rs.100

They were entitled to 5% commission and 2% del credere commission on total

gross sale proceeds. They sent their account sales to their principal showing as a
deduction there from their commission and the various expenses incurred by them
a month later. All the debtors except one who owed Rs.200 paid cash and the
bansal Stores remitted the amounts due on consignment.
Show the journal entries in the books of the consignor and the consignee’s account
and consignment account in the consignor’s ledger. Show also the entries relating
to consignment inwards and the consignor’s personal accounts at it would appear
in the consignee’s ledger. [ PROFIT 14516 ]

Q.12 On January 1, 2002, A of delhi sent on consignment to B of Bombay 200

packets of coffee costing Rs.80 each invoiced pro forma at Rs.100 each. The
freight and other charges paid by A amounted to Rs.640. A sent the documents
through Bank and drew upon B a bill for Rs.10,000 and discounted the same with
the Bank for Rs.9,800. The bill was met on maturity.
On march 15, B sent Account sales (together with the amount due) showing that
150 packets had realised Rs.100 each and 25 packets Rs.110 each and 25 packets
were shown as unsold stock. B incurred Rs.400 as expenses for the entire
consignment. B is entitled to a commission of 6%.
On March 31 B informed A that 15 packets were damaged due to bad packing and
it was estimated that the selling price of the damaged packets would be about
Rs.20 per packet.
Both A and B close their books on March 31. Prepare ledger accounts in the books
of A and B. [ PROFIT 1725 ]

Q.13 Vegetables Oils Ltd., Pune, consigned 10,000 kg. of Ghee costing Rs.20 per
Kg. to Ramesh and Company of Madras on 1st January 2002. Oils Ltd. paid
Rs.50,000 as freight and insurance. 250 Kgs. of ghee were destroyed on 10-1-2002
in transit. The insurance claim was settled at Rs.4,500 and was paid directly to the
consignors.
Ramesh and Co. took delivery of the consignment on 20th January 2002 and
accepted a bill drawn upon them by Oils Ltd. for Rs 1,00,000 for 3 months. On
31st March 2002 Ramesh and co. reported as Follows.
(i) 7,500 Kg. were sold at Rs.30 per Kg.
(ii) Other expenses were : godown rent Rs.2,000; Wages Rs.20,000 Printing and
Stationary including advertising Rs.10,000
(iii) 250 Kg. were lost due to leakage.

Ramesh and Co. are entitled to a commission of 4.5% on all the sales affected by
them. They paid the amount due in respect of consignment on 31st March itself.
Show the consignment account, the account of Ramesh and Co. and loss-in-transit
account in the books of consignor for the year ended 31st March 2002. [ LOSS
9559 ]

Q.14

MAY 2018

Q.15 Raj of Gwalior consigned 15,000 kgs of Ghee at ` 30 per kg to his agent Siraj
at Delhi. He spent ` 5 per kg as freight and insurance for sending the Ghee at Delhi.
On the way 100 kgs. of Ghee was lost due to the leakage (which is to be treated as
normal loss) and 400 kgs. of Ghee was destroyed in transit. ` 9,000 was paid to
consignor directly by the Insurance company as Insurance claim.
Siraj sold 7,500 kgs. at ` 60 per kg. He spent ` 33,000 on advertisement and
recurring expenses.
You are required to calculate:
(i) The amount of abnormal loss
(ii) Value of stock at the end and
(iii) Prepare Consignment account showing profit or loss on consignment, if Siraj is
entitled to 5% commission on sales. 10 M NOV 2018

Q.16 In case of consignment sale, ownership of goods will be transferred to consignee at the
time of receiving the goods. May 2019 2m

Q.17 Anand of Bangalore consigned to Raj of Pune, goods to be sold at invoice price
which represents 125% of cost. Raj is entitled to a commission of 10% on sales at
invoice price and 25% of any excess realized over invoice price. The expenses on
freight and insurance incurred by Anand were ` 12,000. The account sales received
by Anand shows that Raj has effected sales amounting to ` 1,20,000 in respect of
75% of the consignment. His selling expenses to be reimbursed were ` 9,600 10%
of consignment goods of the value of ` 15,000 were destroyed in fire at the Pune
godown and the insurance company paid ` 12,000 net of salvage. Raj remitted the
balance in favour of Anand.
You are required to prepare Consignment Account and ·the account of Raj in the
books of Anand along with the necessary calculations. (10 Marks) NOV 2019

Q.18 Mr. A of Assam sent on 18th February, 2017 a consignment of 1,000 DVD
players to B of Bengal costing ` 100 each. Expenses of ` 1,500 were met by the
consignor. B spent ` 3,000 for clearance and selling expenses were ` 20 per DVD
player.
B sold on 15th March, 2017, 600 DVD players @ ` 160 per DVD player and again on
20th May, 2017, 300 DVD players @ ` 170 each.
B is entitled to a commission of ` 25 per DVD player sold plus ¼ of the amount by
which the gross sale proceeds less total commission thereon exceeded a sum
calculated @ ` 125 per DVD player sold. B sent the amount due to A on 30th June,
2017.
You are required to prepare the consignment account and B’s account in the books
of A. RTP MAY 2018

Q.19 On 1.1.2018, Mr. Jill of Mumbai consigned to Mr. Jack of Chennai goods for sale
at invoice price. Mr. Jack is entitled to a commission of 5% on sales at invoice price
and 20% of any surplus price realized over and above the invoice price. Goods
costing ` 1,00,000 were consigned to Chennai at the invoice price of ` 1,50,000. The
direct expenses of the consignor amounted to ` 10,000. On 31.3.2018, an account
sales was received by Mr. Jill from Mr. Jack showing that he had effected sales of `
1,20,000 in respect of 4/5th of the quantity of goods consigned to him. Mr. Jack’s
direct expenses were ` 3,000. Mr. Jack accepted a bill drawn by Mr. Jill for `
1,00,000 and remitted the balance due in cash.
You are required to prepare the consignment account and the account of Mr. Jack in
the books of Mr. Jill. RTP NOV 2018

Q.20 Mr. Green of New Delhi purchased, 10,000 pieces of sarees at ` 100 per saree.
Out of these 6,000 sarees were sent on consignment to Mr. White of Calcutta at the
selling price of ` 120 per saree. The consignor paid ` 3,000 for packing and freight.
Mr. White sold 5,000 sarees at ` 125 per saree and incurred ` 1,000 for selling
expenses and remitted ` 5,00,000 to New Delhi on account. Mr. White is entitled to
a commission of 5% on total sales plus a further commission at 20% of surplus price
realized over invoice price.
You are required to prepare Consignment Account in the books of Mr. Green and Mr.
Green’s account in the books of agent Mr. White. RTP MAY 2019

Q.21 Manoj of Noida consigned to Kiran of Jaipur, goods to be sold at invoice price
which represents 125% of cost. Kiran is entitled to a commission of 10% on sales at
invoice price and 25% of any excess realised over invoice price. The expenses on
freight and insurance incurred by Manoj were ` 15,000. The account sales received
by Manoj shows that Kiran has effected sales amounting to ` 1,50,000 in respect of
75% of the consignment. His selling expenses to be reimbursed were ` 12,000. 10%
of consignment goods of the value of ` 18,750 were destroyed in fire at the Jaipur
godown. Kiran remitted the balance in favour of Manoj.
You are required to prepare consignment account in the books of Manoj along with
the necessary calculations. RTP NOV 2019

Q.22 Ganpath of Nagpur consigns 500 cases of goods costing ` 1,500 each to
Rawat of Jaipur. Ganpath pays the following expenses in connection with the
consignment:

RTP MAY 2020