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CHANAKYA Batch
CONSIGNMENT DPP

1. Shri Ganpath of Nagpur consign 500 cases of goods goods of the value of Rs.15,000 were destroyed in
costing Rs. 1,500 each to Rawat of Jaipur. Shri fire at the Pune godown and the insurance company
Ganpath pays the following expenses in connection paid Rs.12,000 net of salvage. Raj remitted the
with the consignmet: balance in favour of Anand.
Particulars Rs. You are required to prepare Consignment Account
Carriage 15,000 and the account of Raj in the books of Anand along
Freight 45,000 with the necessary calculations.
Loading Charges 15,000 [Nov.2019, 10 Marks]
Shri Rawat sells 350 cases at Rs.2,100 per case and
incurs the following expenses: 4. Maya consigned 400 boxes of shaving brushes, each
Clearing charges 18,000 box containing 100 shaving brushes. Cost price of
Warehousing and Storage charges 25,000 each box was Rs.3,000. Maya spent Rs.500 per box
as cartage, freight, insurance and forwarding charges.
Packing and selling expenses 7,000
One box was lost on the way and Maya lodged claim
It is found that 50 cases were lost in transit and with insurance company and could get Rs. 2,700 as
another 50 cases were in transit. Shri Rawat is entitled claim on average basis. Consignee took delivery of
to a commission of 10% on gross sales. Draw up the the rest of the boxes and spent Rs.1,99,500 as non-
Consignment Account and Rawat’s Account in the recurring expenses and Rs.1,12,500 as recurring
books of Shri Ganpath. expenses. He sold 370 boxes at the rate of Rs.65 per
[May 2018, 10 Marks] shaving brush. He was entitled to 2% commission on
sales plus 1% del credere commission.
2. Raj of Gwalior consigned 15,000 kgs. of Ghee at You are required to prepare Consignment Account
Rs.30 per kg. to his agent Siraj at Delhi. He spent Rs. [Nov.2020, 5 Marks]
5 per kg. as freight and insurance for sending the
Ghee at Delhi. On the way 100 kgs. of Ghee was lost
5. A Products Limited of Kolkata has given the
due to the leakage (which is to be treated as normal
following particulars regarding tea sent on
loss) and 400 kgs. of Ghee was destroyed in transit
consignment to C Stores of Mumbai :
Rs.9,000 was paid to consignor directly by the
Insurance company as Insurance claim. Selling Qty.
Cost Price
Siraj sold 7,500 kgs. at Rs.60 per kg. He spent price consigned
Rs.33,000 on advertisement and recurring expenses. 5 Kg. Tin Rs.100 each Rs. 500 each 1,000 Tins
You are required to calculate: 10 Kg. Tin Rs.180 each Rs.250 each 1,000 Tins
(i) The amount of abnormal loss. (i) The consignment was booked on freight “To
(ii) Value of stock at the end and Pay” basis. The freight was charged @ 5% of
(iii) Prepare Consignment account showing profit or selling value.
loss on consignment if Siraj is entitled to 5%
(ii) C Stores sold 500, 5 kg. Tins and 800, 10kg.
commission on sales. Tins. It paid insurance of Rs.10,000 and storage
charges of Rs.20,000.
3. Anand of Bangalore consigned to Raj of Pune, goods
(iii) C Stores is entitled to a fixed commission @
to be sold at invoice price which – represents 125% 10% on Sales.
of cost. Raj is entitled to a commission of 10% on
sales at invoice price and 25% of any excess realized (iv) During transit 50 quantity of 5kg. Tin and 20
over invoice price. The expenses on freight and quantity of 10kg. Tin damaged and the
insurance incurred by Anand were Rs.12,000. The transporter paid Rs.5,000 as damage charge.
account sales received by Anand shows that Raj has Prepare the Consignment Account in the books of A
effected sales amounting to Rs.1,20,000 in respect of Products Limited. [Jan. 2021, 10 Marks]
75% of the consignment. His selling expenses to be
reimbursed were Rs.9,600. 10% of consignment
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6. Max Chemical Works consigned 700 boxes of

medicines to Raja Medical Stores at an invoice price
of Rs.1,68,000 which was 20% above the actual cost
price and paid Rs.14,000 for Insurance and freight. In
the course of transit, 50 boxes were lost and the
transporter paid Rs.22,000 for the loss. The
Consignee took the delivery of the remaining boxes
and incurred Rs.9750 for carriage. The Consignee
sold 500 boxes for Rs.1,60,000 and incurred Rs.6,000
for selling expenses. The Consignee is entitled to a
commission of 6% on gross sales.
Show the Consignment Account.
[July 2021, 10 Marks]
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Hint and Solution

1. In the books of Shri Ganpath 2. In the Books of Raj Consignment A/c.
Consignment to Rawat of Jaipur Account Particlars Rs. Particular Rs.
To Goods sent on 4,50,000 By Siraj (sale) 4,50,000
Particlars Rs. Particular Rs. consignment A/c
To Goods sent on 7,50,000 By Rawat (Sales) 7,35,000 To Cash (Freight & 75,000 By Insurance Co. 9,000
Consignment Insurance)
To Bank 75,000 By Goods lost in 82,500 To Siraj 33,000 By Profit & Loss 5,094
(Expenses: 15,000 Transit 50 cases @ (Advertisment) A/c
+ 45,000 + 15,000) Rs. Rs.1,650 each*
To Siraj 22,500 By Stock on 2,46,644
To Rawat 50,000 By Consignment (Commission) Consignment A/c
(Expenses: 18,000 Inventories:
+ 25,000 + 7,000) To Profit & Loss 1,30,238
A/c (Profit)
To Rawat 73,500 In hand 50@ 84,750
(Commission) Rs.1,695 each 7,10,738 7,10,738
To Profit on 36,250 In hand 50@ 84,750
Consignment t/f to Rs.1,695 each
Profit & Loss A/c Note:1
By Consignment 82,500 Value of stock per kg after treatment of normal loss:
Inventories: In
Quantity Amount(Rs.)
transit 50@
Rs. 1,650 each** 15,000 kg. @30 4,50,000
9,84,750 9,84,750 Add: Freight & Insurance 75,000
*Consider as abnormal loss Total 5,25,000
**The goods in transit (50 cases) have not yet been Less: Normal Loss (100 kg) –
cleared. Hence the proportionate clearing charges on 14,900 kg 5,25,000
those goods have not been included in their value.
5, 25,000
Rate per kg. =  Rs.35.2348
RAWAT’s Account 14,900kg
Particlars Rs. Particular Rs. Note: 2
To Consignment to 7,35,000 By Consignment 50,000 Abnormal Loss in Transit:
Jaipur A/c A/c (Expenses)
Cost to the consignor = 14,094
By Consignment 73,500
A/c (Commission)
400 kg 35.2348 = 9,000
By Balance c/d 6,11,500 5,094
7,35,000 7,35,000 Note: 3
Valuation of Stock:
Working Notes:
7000 kg × 35.2348 = Rs.2,46,644
(i) Cosnsignor’s expenses on 500 cases amounts to
Rs.75,000; it comes to Rs.150 per case. The cost
3. In the book of Anand Consignment A/c.
of cases lost will be computed at 11,650 per case. Particulars Amount Particulars Amount
(ii) Rawat has incurred Rs.18,000 on clearing 400 To Goods sent on By Goods sent on Consignment
150000 30000
Consignment A/c(1) A/c (Loading)
case, i.e., Rs.45 per case; while valuing closing To Cash A/c 12000 By Raj (Sale Proceeds) 120000
inventories with the agent 145 per case has been To Raj: By Bank (Insurance claim) 12000
Selling expenses 9600 By Profit and Loss A/c 1200
added to cases in hand with the agent. Commission(2) 13125 22725 (abnormal loss)(3)
(iii) It has been assumed that balance of Rs.6,11,500 To Stock reserve
4500 By Stock on Consignment A/c(4) 24300
(30000×15%)
is not yet paid. By Profit and Loss A/c (Loss) 1725
Total 189225 Total 189225
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‘Raj’s A/c 4. In the books of Maya Consignment a/c

Particulars Amount Particulars Amount
Particulars Amount Particulars Amount To Goods sent on Consignment
12,00,000 By Agent A/c (370×100) @ 65 24,05,000
To Consignment A/c 120000 By Consignment A/c A/c (400 @ 300)
To Bank A/c (forwarding exp.)
2,00,000 By Bank A/c. (Insurance Claim) 2,700
Selling expenses 9600 (400 @ 500)
To Agent A/c By P & L A/c (Loss)(1) (3500 – 2700) 800
Commission 13125 22725 Non-Recurring 1,99,500 By Stock on Consignment a/c 1,16,000
By Bank (bal.Fig.) 97275 Recurring 1,12,500
Commission (24,05,000×3%) 72,150 3,84,150
Total 120000 Total 120000 To P & L A/c (Bal.Fig.) 7,40,350
Total 25,24,500 Total 25,24,500
Working notes:
Working Note :
(1) Calculation of value of Goods sent on
1. Calculation of abnormal loss: Rs.
Consignment:
Original cost of 1 Box 3,000
Abnormal loss – 10% of consignment goods of the
invoice value of Rs.15000 + Proportionate forwarding expenses on 1 Box 500
If, 10% - 150000 – Value of Goods sent on 3,500
Consignment Note: Only forwarding expenses will be taken into
Invoice price = 125% of cost consideration since goods are lost in transit
Loading of goods sent on consignment 2. Valuation of Stock on Consignment Rs.
150000  2 Original cost (29×3000) 87,000
=  Rs.30000
125 + Proportionate Consignor’s
(2) Calculation of Commission  2,00,000 
expenses   29  14,500
Invoice price of the goods sold = 75% of Rs.150000  400 
= Rs.112500 + Proportionate Agent’s non-recurring
Excess of selling price over invoice price =  1,99,500 
Rs.120000 – Rs. 112500 = Rs.7500 Total expenses   29  14,500
 399 
Commission = 10% of Rs.112500 + 25% of Rs.7500
1,16,000
= Rs.11250 + Rs.1875
Note: Non-recurring expenses of Agent were
= Rs.13125 incurred on remaining boxes received by him.
(3) Calculation of Abnormal Loss Rs.
Abnormal loss at cost = 120000 × 10%= 12000 5. In the books of A Product Limited
+ Direct Expenses = 12000 × 10% = 1200 Consignment with C Store, Mumbai a/c
Amount Amount
Particulars Particulars
(Rs.) (Rs.)
13200 To Goods sent on By C Stores (Sales)
Consignment:
5 kg. Tins 1000 × 100 = 1,00,000 5 kg. Tins 500 × 150 = 75,000
(–) insurance claim received = 12000 10 kg. Tins 1000 × 180 = 1,80,000 2,80,000 10 kg. Tins 800 × 250 = 2,00,000 2,75,000
To C Stores : By Bank (Claim) 5,000
Loss 1200 Freight
Insurance
20,000
10,000
By P & L A/c (Loss) WN (1)
By Stock on Consignment:
4,225

WN(2)
(4) Calculation of Closing Inventories Storage 20,000 5 kg Tins 48,375
Commission (2,75,000×10%) 27,500 77,500 10 kg. Tins 34,650 83,025
To Profit & Loss A/c (Bal. Fig.) 9,750
100% Total 3,67,250 Total 3,67,250

– 75% (sold) Working Notes:

– 10% (loss) (1) Calculation of Abnormal Loss of Tines:
Rs. Rs.
____ (a) Original Cost of 5 kg. tin (50×100) 5,000
Add: Proportionate freight [5% of (50×100) 375 5375
15%
(b) Original Cost of 10kg. tin (20×180) 3,600
At invoice price = 150000 × 15% = 22500 Add: Proportionate freight [5% of (20×250)] 250 3850
Total (a+b) 9,225
1800 Less: Claim Received 5,000
+ Direct expenses = 12000 × 15% = Loss transferred to P&L A/c 4,225
24300
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(2) Calculation of Stock on Consignment: Working Notes:

Rs. Rs. (1) Calculation of Abnormal Loss: Rs.
(a) Original Cost of 5 kg. tin (450×100) 45,000
Add: Proportionate freight [5% of (450×150) 3,375 48,375 Cost 50 boxes × 200 = 10,000
(b) Original Cost of 10kg. tin (180×180) 32,400 Add: Proportionate Insurance
Add: Proportionate freight [5% of (180×250)] 2,250 34,650
 14000 
Total (a+b) 83,025 & Freight   50  = 1,000
 700 
6. In the Books of Max Chemical Works 11,000
Consignment A/c. (2) Calculation of Stock on Consignment: Rs.
Amount Amount
Invoice price of remaining
Particulars Particulars
(Rs.) (Rs.) 150 boxes (150×240) = 36,000
To Goods sent on By Goods sent on
1,68,000 28,000
Consignment: 700 box @ 240 Consignment 700 box @40 Add: Proportionate insurance
To Cash A/c By Abnormal Loss(1) 11,000
By Raja Medical Stores  14000 
Insurance & Freight 14,000
(Sales)
1,60,000
& freight   150  = 3000
To Raja Medical Stores: By Stock on Consignment a/c (2) 41,250  700 
Carriage 9,750
Selling Exp. 6,000 Add: Proportionate
Commission 9,600 25,350
 9750 
To Stock Reserve A/c (150 box
@ 40)
6,000 carriage   150  = 2250
To Profit & Loss A/c 26,900  650 
Total 2,40,250 Total 2,40,250
41,250

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