Sem.:-I CC 103 Accountancy - I Consignment Accounts

Sem.:-I
CC 103 Accountancy - I
(Compulsory Subject.)
Unit Particulars Marks
Unit – 1 Consignment 25%
Unit – 2 Branch Accounts.(excluding Foreign
Branch)
25%
Unit – 3 Insurance Claims: Claims for loss or
stock & fixed assets; claim for profit or
consequential loss.
25%
Unit – 4 Accounts from Incomplete Records:
Conversion Method only (Use of ratios to
find out missing data is not expected)
25%

Introduction:
Any manufacturer or whole seller wants to
sale his goods in other city or state, there are
many methods in modern age. Out of these sale
on consignment is one of the methods. But it is
too difficult and expensive, therefore he appoints
agent in the city and he sends of the goods on his
own risk and agent sales goods on behalf of
sender of the goods. Who sends the goods is
called principals or consignor and whom the
goods are sent is called agent or consignee.

Consignee receives the goods on behalf of the
consignor and on risk of the consignor and he
sales the same. Consignee dose not purchase the
goods and also he become owner of the goods
but he tries to dell the goods and receives the
commission on the goods sold by him. The goods
not sold at end of year, ownership of it remains
with consignor. This kind of business is
called, business on consignment.

Features(Characteristics)
The features of above explanation is below
1.The relation between two parties is that of a
principal and an agent. Is that not that of a buyer and
a seller
2.Goods are sold at the risk of the consignor only.
Profit or loss on consignment belongs to him. The
consignee is concerned with his commission only.
3.If the goods are damaged or destroyed, the
consignee is not responsible in any way.
4.The consignee is entitled to recover all expenses
that the he incur in connection with the consignment.

Journal Entries and Accounting in the
Consignment
(A) In the book of consignor’s Accounts :
There are three main accounts are
prepared in the ledger of a consignor
1.Consignment A/c
2.Goods Sent on Consignment A/c.
3.Consignee’s A/c

Journal entries in the books of the consignor
1. When goods are sent on consignment.
Consignment A/c Dr. ….
To Goods Sent on Consignment A/c) ….
(Goods Consigned to agent)

2. When the Consignor pays Expenses….
Consignment A/c Dr. …..
To Cash A/c …..
(Insurance, Wages, Freight etc expanses paid for
goods sent on Consignment)

3. When an advance Cash, Draft or Bill of Exchange is
received from consignee
Cash or Bank or Bills receivable A/c Dr. ….
To Consignee’s A/c. ……
(The amount of advance cash, draft and bills is received
from consignee is accepted)

4. When the Consignor discount the Bills
Receivable in the bank…..
Cash & Bank A/c Dr. ……..
Consignment A/c Dr. (Discount)….
To Bills Receivable A/c. …….
(The amount received on discounting the bill.)

5. Entry for Sale
Consignees’ A/c. Dr. …….
To Consignment A/c. …….
(Sale proceed of good sent on consignment)

6. Expenses paid by Consignee…
Consignment A/c. Dr. …….
To Consignees’A/c ……
(Insurance, Wages, Freight etc. expenses paid by
the Consignee)

7. Commission payable to the consignee..
Consignment A/c. Dr. …….
To Consignee A/c. …….
( Commission payable to the consignee at __% on
sales proceed)

8. Cash, Draft, or Bills of exchange is received
from the consignee..)
Cash/ Bank/ bills receivable A/c Dr. …….
To Consignor A/c ……
(The Cash/Draft/ Bills receivable from the
Consignee)

9.Closing Stock of Consignment..
Consignment Stock A/c. Dr. …..
To Consignment A/c. ……
(Closing stock of consignment is shown into
books)

10.Profit / Loss on Consignment A/c….
(A) If consignment a/c show the credit balance
i.e. Profit :
Consignment A/c Dr. …….
To Profit & Loss A/c. …….
(Profit of consignment is Transfer to P&L A/c.)

B. If consignment a/c show a debit balance,
i.e. Loss :
Profit & Loss A/c. Dr. …….
To Consignment A/c. ……
(Loss on consignment is transfer to P & L A/c.)

11.Closing the goods sent on Consignment A/c…
Goods sent on Consignment A/c. Dr. …….
To Trading A/c. ….
(Goods sent on consignment is transferred to
Trading A/c)

(B) Accounting entries in the books of
consignee….
Consignee prepared only Consignor A/c.
in the Account books.

1.Consignee give advance to the Consignor….
Consignor’s A/c. Dr. ……
To Cash/ Bank/ Bills payable A/c. ……
(Amount of advance sent by cash or draft or by
bills)

2. Consignee pays expenses on behalf of
consignor….
Consignor’s A/c. Dr. …..
To Cash A/c. ……
(Expenses paid on the consignment onward)

3.consignee sold the goods…..
(A) For cash sales….
Cash/ Bank A/c. Dr. ……..
To Consignor’s A/c. …….
(Goods sold at cost)

B. For Credit Sale…
Debtors A/c. Dr. ……
To Consignor’s A/c. ……
(Goods sold on credit.)

C. Goods return from Credit Sales…
Consignor’s A/c. Dr. …….
To Debtors A/c. ……
(Goods return from credit sales)

D. Consignee retained (purchased) the goods
for own use….
Purchase A/c. Dr. ……..
To Consignor’s A/c. …….
(Consignee retained the goods for own use)

4. Commission due on sales….
To Commission A/c. ……
(Commission due on sales at __%)

5. For Account is Settled….
To Cash / bank / Bills payable A/c. …….
(Amount of cash or bank draft of bills sent for
settlement)

Ex:-1
A of Ahmadabad consigned goods worth
Rs.50,000 to C of Kolkata and paid Rs. 4,000 for
railway freight and carriage. C accepted as an
advance a bill of Rs. 20,000 drawn by A, which the
latter discount of Rs. 600 C paid Rs. 2,000 for
clearing and other charges, He sold all the goods
for Rs. 70,000. He is entitled to a commission as
5% on sales. He settled his account with a bank
draft for the balance. Make journal entries and
prepare necessary accounts in the books of both
parties.

Journal entries in the books of consignor
Ahmadabad's ‘A’ accounts :
1. When goods are Sent on consignment….
Consignment A/c Dr. `50,000
To Goods Sent on Consignment A/c `50,000
( `50,000 of Goods Consigned to agent)

2.When Consignor pays Expenses…
Consignment A/c Dr. ` 4,000
To Cash A/c ` 4,000
( `4000 Freight expanses paid for goods sent on
Consignment)

3. When an advance is received from consignee ….
Bills Receivable A/c Dr. ` 20,000
To Consignee’s A/c. ` 20,000
(The amount of `20,000 advance bills is received from
consignee is accepted)

4. When Consignor discount the Bills
Receivable in the bank
Cash A/c Dr. `19,400
Consignment A/c Dr. ` 600 (Discount)
To Bills Receivable A/c. `20,000
(The amount received on discounting the bill.)

5. Sale by the Consignee…..
Consignee A/c. Dr. `70,000
To Consignment A/c. `70,000
(Sale proceed of good sent on consignment)

6. Expenses paid by Consignee…
Consignment A/c. Dr. 2,000
To Consignee’s A/c 2,000
( Clearing and other expenses paid by the
Consignee)

7. Commission payable to the consignee..
Consignment A/c. Dr. ` 3,500
To Consignee A/c. `3,500
( Commission payable to the consignee at 5% on
sales proceed)

8. Amount received from the consignee..
Bank A/c Dr. ` …..
To Consignee's A/c `…….
( The Draft or Bill Receivable from the Consignee)

9. Profit / Loss on Consignment A/c….
Consignment A/c Dr. `……
To Profit & Loss A/c. `…..
(Profit of consignment is Transfer to P&L A/c.)

10. Closing the goods sent on Consignment A/c…
Goods sent on Consignment A/c. Dr.` ......
To Trading A/c. ` ......
(Goods sent on consignment is transferred to
Trading A/c)

B. Necessary Accounts
Dr. Consignment A/c. Cr.
Particulars ` Particulars `
To,Good sent on consi. A/c 50,000
To, Cash A/c. 4,000
By, Consignee's A/c (Sale ) 70,000
To,Consignee's A/c 2,000
To,Consignee's A/c
(Commis.) 3,500
70,00070,000
Profit: To, P & L A/c. 9,900
Slide-40
To, Bills Reciveable A/c 600

Dr. Consignee 'C' A/c.
Cr.
Dr. Good sent on consignment A/c. Cr.
By Consignment A/c 50,000
By Bills Reciveble A/c 20,000
To, Consignment A/c. 70,000
By Consignment A/c (Exp.) 2000
By Consignment A/c (Comm) 3,500
To Treding 50,000
44,500
50,00050,000
70,000 70,000
By Bank A/c (Draft)
Slide-39

(B) Accounting Entries in the Books of
Consignee :
Consignee prepared only Consignor’s
A/c. in the Account books.

1. Consignee give advance to the Consignor….
Consignor’s A/c. Dr. `20,000
To Bills payable A/c `20,000
(`20,000 advance sent by bills)

2. Consignee pays expenses on behalf of
Consignor….
To Cash A/c. `2,000
(Expenses paid on the consignment onward)

3. Sold the goods…..
A. For Cash sales….
Cash/ Bank A/c. Dr. `70,000
To Consignor’s A/c. `70,000
(Goods sold at cost)

4. Commission due on sales….
To Commission A/c. `3,500
(Commission due on sales at 5%)

5. For Account is Settled….
To Bank A/c. `44,500
(Amount of cash or bank draft of bills sent for
settlement)

Dr. Consignor 'A' A/c.
Cr.
Particular ` Particular `
To Bills payble A/v (Adv.) 20,000 By Cash A/c. (Sale) 70,000
To Cash A/c. (Exp.) 2,000
To Commission A/c (Commi.) 3,500
44,500
70,000 70,000
To Bank A/c.

VALUATION OF CLOSING STOCK
When the whole of goods sent on consignment
is not sold, the value of the closing stock of
consignment should be ascertained and brought
into the books to ascertain the profit. The
following points should be remembered in this
connection:
1.Proportionate expenses of the consignor are
added to the cost of the goods lying unsold with
the consignee. The expenses incurred on goods
sent increase the cost of the goods.

2. Proportionate expenses incurred by the consignee
may also be added to the value of the closing
stock. Only non-recurring expenses should be
considered for the purpose. Naturally selling
expenses incurred by the consignee can not be
included as are recurring expenses * e.g.
advertisement, salary of the salesmen etc. are
such expenses and they do not increase the value
of the goods lying in stock.

Consignee’s Expenses
Non-recurring Recurring
(1) Clearing Charges
(2) Customs
(3) Octroi
(4) Carriage inwards the
proportionate share of
above expenses are
added to the cost of
closing stock.
(1) Godown Rent
(2) Insurance
(3) Office and
Administrative charges
Proportionate share of
such expenses should
not be added to the
cost of closing stock.

3. The closing stock should be at the cost price or market
price whichever is lower. Proportionate expenses must
be added, if the closing stock is valued at cost. In case
the market price is lower then the cost price, the
proportionate expenses should not be added and must be
valued at the market price only.
4. When the closing stock of consignment contains
damaged goods that require repairs, the value of the stock
is reduced to the extent. Alternatively, a reserve may be
created to the extent of the estimated expenses on repairs.

The valuation of closing stock would be done as follows:
Units Rs.
(1)Cost of goods sent
(2)Add: Expenses paid by consignor
Total cost of goods sent
(3)Less: Goods destroyed in transit or goods that did
not reach
(i)Destroyed in Transit
(ii)Goods that did not reach the consignee
(Goods –in- transit)
(4)Less: Shortage or Normal loss (Only Units)
(5)Add: Consignee’s non-recurring exp.
Cost of Saleable goods received by Consignee
…… ……
……
…….
…….
……
……
……
……
……
……
……
…… ……
Cost of Saleable Goods
Cost of Closing Stock = Units of Stock X
Saleable Units

LOSS OF THE GOODS SENT ON CONSIGNMENT:
When goods sent on consignment, some of the goods
may be destroyed by some accident or there may be some
inevitable loose due to causes like evaporation, breaking of
bulk etc. such losses are classified into two categories:
(1) Normal loss and (2) Abnormal loss
Normal Loss: The loss which is unavoidable and cannot
be prevented is normal loss. It occurs due to natural causes
like evaporation or due to the nature of goods. No entry for
loss will be made in the book of accounts.

(2) Abnormal Loss: Loss due to carelessness or natural
calamity etc. which dose not occur regularly is abnormal
loss, e.g. goods destroyed by fire. This loss is an abnormal
loss because it dose occur regularly in consignment
business. Hence it must be transferred to the Profit and
Loss A/c. directly. The entry will be follows:
Profit and Loss A/c Dr. ………
To consignment A/c ……….
If the Insurance Co. accepts only part of the claim then the
entry will be…..
Insurance co’s A/c Dr. …….
Profit & Loss A/c Dr. …….
To Consignment A/c (Total amt. of loss)……..

DEL CREDERE COMMISSION:
Generally, commission is allowed the consignee on the
gross sale proceeds. The consignee dose not undertakes
any responsibility for bad debts in case of credit sales. But
the consignor dose not know anything about the financial
position of the customer who purchases on credit from the
consignee. Hence, the consignor would like to shift this
responsibility to the consignee, who is in touch with the
customers. An extra commission is allowed for
undertaking the termed Del Credere Commission. When
Del credere commission is allowed to the consignee, he
pays the full amount of credit sale and bears the bad debts,
if any. In such a case, no entry is passed for bad debts in
the books of the consignor.

1. Del credere commission is calculated only on
credit sales if it is given in the example.
2. If the total sale is given but the amount of the
credit sale is not specified, then the total sale
should be considered as credit sale and del
credere commission should be calculated
accordingly.
3. Not del credere commission should be allowed
on goods purchased by the consignee himself

Account Entries:
In the book of consignor:
1.When delcredere commission allowed to the consignee,
no entry is made in the consignor’s book for bad debts.
2.when no delcredere commission is allowed to the
consignee the amount of bad debts is debited to
consignment account and is credited to consignee’s
account.
3.when goods are sold on recommendation of the consignor
then the loss of bad debt is to be borne by the consignor
and not by the consignee. Hence, the consignor will debit
consignment account and credit consignee’s account with
amount of bad debts.

In the book of consignee’s:
1.When del credere commission is allowed to the
consignee, he will credit the commission Account, as the
amount is recoverable from the consignor. In such case is
any bad debt, the same has to be borne by the consignee.
It will reduce his commission income. The entry will be
made as follows:
Bank A/c Dr. …….
Bad Debts A/c Dr. …….
To Consignment Debtors A/c ……..
Commission A/c Dr. …….
To Bad Debts A/c …….

2. If del credere commission is not allowed to the
consignee and there is any bad debt the same would be
debited by the consignee to consignor’s account and
credited to the consignment debtors account.
3. When goods are sold on the recommendation of the
consignor, the consignee will debit consignor’s
Account credit customer’s account.

Example of normal and abnormal loss:
Ex:5
On 1st
September 2010, Vijay & Co. Bombay sent on
consignment to Sanjay Bros. of Surat 1000 Table fans costing Rs.
300 each. The freight and other charges on the consignment
amounted to Es.25000. 100 Table fans were destroyed in transit due
to accident and the Insurance Co. accepted the claim of Rs. 12,000.
Sanjay Bros. paid Rs. 18,000 for expenses of remaining goods.
The consignee accepted a bill of Rs.1,00,000 drawn by the
consignor, which latter discounted for Rs.95,000. From the Account
Sale received from Sanjay Bros. it was seen that 800 fans were sold
at Rs.450 each. Sanjay Bros. had paid Rs. 6,000 for storage and
advertisement. Consignee were entitled to a commission of 5% on
sales. Prepare Consignment Account in the Books of Vijay & Co.

In book of Vijay & Co,
Dr. Consignment Account Cr.
Particular Particular` `
To Good sent on cnsi. A/c
(1000fans x Rs.300 each)
3,00,000
To Cash A/c.
(Freight & Oth. Charges)
25,000
To Sanjay Bros. A/c. 18,000
To Bill receivable A/c (Disc) 5,000
By Insurance A/c. 12,000
By P & L A/c. 20,500
To. Sanjay Bros. A/c Exp. 6,000
By Sanjay Bros. A/c.(Sale) 3,60,000
To. Sanjay Bros. A/c
Comm.
18,000
By Consignment stock A/c 34,500
4,27,000
To P & L A/c Profit 55,000
4,27,000
Slide62

Abnormal loss:
100 fans x Rs.300 = 30,000
+Proportionate Expenses of Consignor 2,500
(1000 ; 25,000 :100 ; ? ) 32,500
(25,000 x 100 / 1000 )
Insurance Co. A/c. 12,000
Profit & Loss A/c 20,500
To Consignment A/c 32,500
Sale:
800 Fans x Rs.450 = 3,60,000 and Commission 5% is 18,000
Closing Stock;
Total Fans 1000
Less : Destroyed 100
+ Sale 800 900
Stock =100
Value of Stock:-
Cost price 100 x 300 = 30,000
+ Proportionate Expenses of Consignor 2,500
32,500
+ Consignee’s non-recurring exp.(900 ;18,000 : 100 ; ?) 2,000 (18000x100/900)
34,500Slide61

GOODS INVOICED AT SELLING PRICE :
Ordinarily the pro-forma invoice is prepared at the cost price. But
sometimes, it is also prepared at a selling price.
(1) The purpose is not to let the consignee know the cost of goods.
Otherwise, the consignee will come to know the profit earned on
consignment which may induce him to deal in those goods himself.
(2) By showing higher price, the consignor want to indirectly ask the
consignee to sell goods at high price.
(3) By showing higher cost, the Consignor shows a lower profit margin,
so that the consignee dose not demand a higher commission. The
consignor will add a margin of profit while preparing the pro-forma
invoice.
In this case the account can be prepared in Consignor ‘s books on
the basis of the invoice price , so following adjustments entry must be
pass have to be made while ascertaining profit or loss on consignment.
Good sent on Consignment A/c. Dr. ……….
To Consignment A/c ………
( Being the adjustment for difference between invoice price and cost
price)

Under this method, even the closing stock is valued at invoice price,
which is credited to the Consignment A/c. This will necessitate passing an
adjustment entry for the difference. The consignment account will be
debited and the consignment stock reserve A/c. will be credited with the
difference.
the entry will be pass as follows :
Consignment A/c Dr. ……….
To Consignment Stock Reserve A/c ……….
(the adjustment for bringing the closing stock to the cost price.)
A table covering the percentage on cost from given percentage
on invoice price:
% on invoice price % on cost price
10% 11 1/9% (1/9 th of cost)
16 2/3 % 20% (1/5 th of cost)
20% 25% (1/4 th of cost)
25% 33 1/3% (1/3 rd of cost)
33 1/3% 50% (1/2 of cost)
50% 100% (Profit equal to cost)

Ex.11: Royal Radio consigned 500 radios to Prabhat Radio Service on 1-3-2006.
The cost price was Rs. 600 Per radio, but the pro-forma invoice was made out at
a figure so as to show a profit of 25% on invoice price.
On the same day, Royal Radio incurred the following expenses :
Carriage Rs. 1,000
Freight Rs. 15,000
Insurance Rs. 12,500
On the same day, Prabhat Radio Service sent a bank draft for Rs. 1,22,000.
On 30th
June,2006 Prabhat Radio Service sent an account Sale and a Bank draft
for the amount payable. According to the Account sale 300 Radios were sold at
Rs.820 each for cash. 50 Radios were sold at Rs. 850 each to Nitin on credit and
20 Radios were sold at Rs. 840 each to Sanatan on the recommendation and
responsibility of Royal Radio. Selling expanses incurred Rs.5,225; Octroi
incurred Rs. 3,500.
Nitin and Sanatan became bankrupt and Prabhat Radio could recover only 80%
from their estate.
Prabhat Radio Service is entitled to receive a commission of 5% on sale and 2%
Del Credited Commission on credit sales, and 1/7 share of the net profit on
consignment after deducting both his commission and share of profit
Prepare necessary Account in the books of the consignor
(Guj. Uni.F.Y. April-2004)

Calculation:-
(1)The invoice is prepared, so as to make a profit of 25% on invoice price
Suppose invoice price = Rs. 100
Less: Profit = Rs. 25
Cost Price = Rs. 75
For Rs. 75 cost ; Rs. 100 invoice price
“ 600 “ ; (?) 600x100 = Rs.800
75
Profit is Rs. 800 – 600 = 200 Rs.
So amount of total price is 500 radio X Rs. 800 = Rs.4,00,000
and Profit is 500 radio X Rs 200 = Rs.1,00,000.
Sale :- Cash 300 Radios X Rs. 820 each = 2,46,000
On credit 50 “ X Rs. 850 “ = 42.500 to Nitin
“ 20 “ X Rs. 840 “ = 16,800 to Sanatan on Recomm.
370 3,05,300
Commission:- Rs. 3,05,300 X 5% = 15,265
Del Credited Rs. 42,500 X 2% = 850
16,115 Slide-68

Closing Stock : (At Invoice Price)
Total Goods Sent = 500 Radios
Less : Sold = 370 “
closing Stock = 130 “
Value Of Stock:-
Invoice Price 130 Radios X Rs. 800 = 1,04,000
+ Consignor Proportion Expenses (28,500 X 130/500) = 7,410
+ Consignee's “ “ (3,500 X 130/500) = 910
Total = 1,12,320
Profit in Closing stock is 130 Ra. X Rs. 200 = Rs. 26,000.
Bad Debts :- Only on Recommended Sale
Total Sale 16,800 X 20% = 3,360 Rs.
Share of Profit with consignee:-
Suppose Profit is Rs.1
+ Consignee share 1/7 = 1 1/7 = 8/7 is total Profit
Total Profit 34,920 x 1/7 x 7/8 = 4,365 Rs.
Net Profit is 30,555. Slide-68

In the book of Royal Radio (consignor)
Dr. Consignment A/c
Cr. ` `
To Good sent on consignment
Ac. (500 ra. x `800 ) 4,00,000
To Cash Ac. (Expenses)
Carriage 1,000
Freight 15,000
Insurance 12,500 28,500
By Prsabhat ra.ser. A/c. (Sale)
Cash - 300 ra x `820= 2,46,000
Credit - 50 “ x `850= 42,500
Recom.- 20 “ x `840= 16,800 3,05,300
By Good sent on consi. A/c
(Profit 500ra.x `200) 1,00,000
To Prabhat Radio Service A/c.
(Exp.) Selling 5,225
Octroi 3,500 8,725
(Bad Debts) 3,360
(Commi.) General 15,265
Del Credited 850 16,115
By Consignment Stock A/c. 1,12,320
To Consi. Stock Res. A/c.(Pft.) 26,000
5,17,6205,17,620
To Prabh.Radio ser. A/c 4,365
To Profit & Loss A/c 30,555 34,920
Slide-67 Slide-66
Slide-69

Dr. Prabhat Radio Service A/c. Cr.
Dr. Good sent on Consignment A/c. Cr.
` `
` `
By Bank A/c (Advance) 1,22,000
To Consignment A/c. (Sale)
Cash - 300 ra x `820= 2,46,000
Credit - 50 “ x `850= 42,500
Recom.- 20 “ x `840= 16,800 3,05,300
By consignment A/c
Ac. (500 ra. x ` 800 ) 4,00,000
To Good sent on consi. A/c
(Profit 500ra.x ` 200) 1,00,000
By Consignment A/c. (Exp.)
Selling 5,225
Octroi 3,500 8,725
By Consignment A/c.
(Bad Debts) 3,360
By Consignment A/c.
Del Credited 850 16,115
By Consignment A/c. 4,365
3,05,300 3,05,300
1,50,735By Bank A/c (Draft)
4,00,0004,00,000
3,00,000To Trading A/c.
Slide-68

Ex.No.46 (Guj.Uni.March,2010)
Calculation:
 Sales price and Profit: cost price ` 1000 + 25% profit is `250 it
means sales price is ` 1250, so total sales price is ` 1250 x 500 fans =
` 6,25,000 and profit is ` 250 x 500 fans = ` 1,25,000.
Bill Receivable Discount: ` 2,40,000 x 12% x 4/12 = ` 9,600
Slide-72
Sale and Commission
Cash - 120 fans x `1500= 1,80,000
Credit -320 “ x `1700= 5,44,000
Recom.- 20 “ x `1600= 32,000 7,56,000
Commission:-
General ` 7,56,000 x 5% = 37,800
Del Credere ` 5,44,000 x 2% = 10,880
Total:- 48,680

Abnormal Loss: 10 fans are destroy by fire and its
Cost price 10 fans x `1000 = 10,000
+propor.ex. of Consignor `30,000 x 10/500 = 600
+ “ of Consignee `45,000 x 10/500 = 900
Total loss :- 11,500
Insurance com. Pass amount ` 8,700, so actual loss is `2,800
Closing Stock: Total sent fans 500
Less : Sale 460
loss 10 470
stock :- 30
Value of stock: 30 f x `1,250=37,500
+ propor.ex. Of Consignor
30,000 x 30/500 = 1,800
+Propor. Non rec. ex of
Consignee 45,000x30/500 = 2,700
Total :- 42,000
Profit in stock :-30x250= 7,500
Bed debts:-
Bad debts count on
recommended sale
32,000 x .50 = 16,000
Slide-72

In book of The Gautam (consignor)
Dr. Consignment A/c
Cr. ` `To Good sent on consignment
Ac. (500 Fan x `1250 ) 6,25,000
Carriage 5,600
Freight 10,000
Insurance 14,400 30,000
By Govind A/c. (Selling)
Cash - 120 fan x `1500= 1,80,000
Credit - 320 “ x `1700= 5,44,000
Recom.- 20 “ x `1600= 32,000
7,56,000
(Profit 500ra.x ` 250) 1,25,000
To Govind A/c.
(Exp.) Adv. 25,000
Octroi 7,800
Ins. 22,200
God.Ex. 15000 70,000
To Govind A/c. (Bad Debts) 16,000
To Govind A/c.
Del Credited 10,880 48,680
By Consignment Stock A/c. 42,000
9,34,5009,34,500
To Profit & Loss A/c 1,27,720
Slide-70 Slide-73
Slide-71
By Insurance Co.A/c. 8,700
“ P.& L. A/c
2,800
To Bill Receivable a/c.(Disc.) 9,600

Dr. Govind’s A/c.(Consignee) Cr.
` `
By bill Recie. a/c (Advance) 2,40,000
By Consignment A/c.
(Bad Debts) 16,000
By Consignment A/c.
7,56,000 7,56,000
By Bank A/c (Draft) 3,81,320
Slide-72
To Consignment A/c. (Selling)
Cash - 120 fan x `1500= 1,80,000
Credit - 320 “ x `1700= 5,44,000
Recom.- 20 “ x `1600= 32,000 7,56,000
To Consgnment A/c.
(Exp.) Adv. 25,000
Octroi 7,800
Ins. 22,200
God.Ex. 15000 70,000

Ex. Guj.Uni.Nov.2011
Sale and Profit :
Suppose cost price is ` 100.
Then profit is 25% ` 25
So selling price is ` 125
If ` 125 selling price that profit is ` 25
` 50,000 “ “ ?
25
=50,000 X----- = ` 10,000 profit
125
So cost if ` 40,000
Total Selling ` 50,000 x 10 = ` 5,00,000
So total profit ` 10,000 x 10 = ` 1,00,000
Solide-78

2,50,000 X 12 X 2
= vvvvvvvvvvvvvv = ` 5,000 Discount
100 X 12
So cash is ` 2,45,000.
Selling and Commission:
1.Selling 5Laptop x ` 54,000 = ` 2,70,000
2.for credit sale 2 “ x ` 60,000 = ` 1,20,000
Total= ` 3,90,000
Commission: 1.General ` 3,90,000 of 5% ` 19,500
2. Del cradiar`1,20,000 of 2% ` 2,400B
Total:- ` 21,900
Bill receivable Discount ov ` 2,50,000 for 4 month and interest 12%
Annual. Discounted after 2 months.
Slide-78

Abnormal loss: 2 Laptop are heavly damage
Cost is ` 40,000 X 2 laptop = 80,000
+Popr.Exp of Consignor s` 19,000 X 2/10) = 3,800
Total loss= ` 83,800
Pass for Insurance ` 72,500 So Abnormal loss if ` 11,300
Closing Stock: Total 10 Laptop
Less:- Sale 7
Loss 2 9 cc
Closing stock 1 cc
Value of Stock ov 1 Laptop ` 50,000
+ Popr.Exp of Consignor “
(19,000 X 1/10) ` 1,900
+ Popr. Non-recu. Exp of Consignor
(12,000 X 1/8) ` 1,500
` 53,400
So Profit in closing stock is = `10,000
Slide-78

A book of Alpesh (Consignor) AccountA book of Alpesh (Consignor) Account
Dr. Consignment A/c. Cr.
` `
To Good sent on co a/c 5,00,000
“ Cash a/c.
Freight 5,000
Carriage 6,000
Insu. 8,000 19,000
“ bill Receivable (Dis.) 5,000
“ Gaurang’s a/c. Exp.
Octroi 5,700
Insu. 6,300
Adv.exp. 4,000 16,000
By Gaurang’s a/c (salling)
Cash:
5 Laptop X 54,000= 2,70,000
Credit:-
2 Laptop X 60,000= 1,20,000 3,90,000
“ Gaurang’s a/c. Comm.
General 19,500
Del Cre. 2,400 21,900
By Insu. Co. a/c 72,500
“ P.&L. a/c. (loss) 11,300 83,800
By Good sent on co a/c (pro.) 1,00,000
(10 Laptop X ` 10,000)
By Consi.stock a/c. 53,400
“ Consig.stock Res.a/c. 10,000
6,24,2006,24,200
P.&L. a/c. 55,300
Slide-75
Slide-76
Slide-77
Slide-79

Dr. Gaurang’s (Consignee) A/c. Cr.
` `
By bill receivable 2,50,000
3,90,000 3,90,000
1,02,100By Bank a/c. (Draft)
To Consignment a/c. (sale)
Cash
5 Laptop X 54,000= 2,70,000
Credit
2 Laptop X 60,000= 1,20,000 3,90,000
“ Consignment a/c. Exp.
Octroi 5,700
Insurance 6,300
Adv. 4,000 16,000
“ Consignment a/c. (Com.)
General 19,500
Del Cradi.co. 2,400 21,900
Slide-78

Ex.No.Ex.No.88
Discount of Bill Receivable:Discount of Bill Receivable:
= 50,000 x 18 x 2
100 x 12 = `1500 Discount
Abnormal loss:
100 Lt. Oil X ` 10 = 1000
+ Prop.Ex.of Consignor
10,000 Lt.Oil : ` 2000
100 “ : ?
100 X 2000
= 10,000 20
1020
Less: Pass by Insurance Co. 800
Abnormal loss: 220

Closing stock: Total send 10,000 Lt.
Less: Sold 8,855 Lt.
1,145 Lt.
Less: Loss 50
Ab n.loss100 150 ”
Closing stock: 995 ”
Value:
Units `
Good send by consignor (`10) 10,000 1,00,000
+ Exp.of “ -- 2,000
Toal cost of good send 10,000 1,02,000
Less: Loss 50 --
Ab n.loss 100 1,020
9,850 1,00,980
Add: Non rec.exp.by consignee -- 1,970
Cost of selling goods 9,850 1,02,950
Value of closing stock:
=Cl.Stock X Value of Stock
Goods of sellable
= 995 X 1,02,950/9,850
= 10,400

Account in book of The Shyamal(consignor)
Dr. Consignment A/c
Cr. ` `To Good sent on consignment
Ac. (800 G x `1600 ) 12,80,000
Carriage 2,400
Freight 9,600
Insurance 12,000 24,000
By Govind A/c. (Selling)
Cash - 160 g x `1800= 1,88,000
Credit - 480 “ x `2000= 9,60,000
Recom.- 80 “ x `1900= 1,52,000 14,00,000
(Profit 800Gx ` 400) 3,20,000
To Amal A/c.
(Exp.) Adv. 22,360
Octroi 6,000
Ins. 18,000 46,360
To AmalA/c. (Bad Debts) 60,800
To Amal A/c.
By Consignment Stock A/c. 1,04,440
18,44,60018,44,600
To Amal a/c. (profit share) 52,240
To Profit & Loss A/c 2,71,200
Slide-42
Slide-43
Slide-44
By Insurance Co.A/c.
15,160
“ P.& L. A/c
5,000
To Bill Receivable a/c.(Disc.) 7,200
Slide-45

Dr. Amal’s A/c.(Consignee) Cr.
` `
By bill Recie. a/c (Advance) 2,40,000
By Consignment A/c.
(Bad Debts) 60,800
By Consignment A/c.
14,00,000 14,00,000
By Bank A/c (Draft) 9,23,400
Slide-41
To Consignment A/c. (Selling)
Cash - 160 g x `1800 = 1,88,000
Credit - 480 “ x `2000 = 9,60,000
Recom.- 80 “ x `1600= 1,52,000 14,00,000
To Consgnment A/c.
(Exp.) Adv. 22,360
Octroi 6,000
Ins. 18,000 46,360
By Consignment A/c. (P.Share)
54,240

Ex.No.39 (Guj.Uni.March,2007)
Calculation:
 Sale price and Profit: Suppose Invoice price is `100 – 25%
profit means `25 = `75 is cost price : if `75 cost price : sale
pr.`100 so what is sale price when cost is `1200
= 1200 x 100/75 = ` 1600 total sale price
So Total sale is 800 Geyser x ` 1600 = ` 12,80,000 and Profit is
= 800 Geyser x `400 = `3,20,000
Bill Receivable Discount: ` 2,40,000 X 18% X2/12 = ` 7,200
Slide-41
Sale and Commission
Cash - 160 G x `1800= 1,88,000
Credit -480 “ x `2000= 9,60,000
Recom.- 80 “ x `1900= 1,52,000 14,00,000
Commission:-
General ` 14,00,000 x 4% = 56,000
Del Credited ` 9,60,000 x 2% = 19,200
Total:- 75,200

Abnormal Loss: 16 geyzer are destroy by fire and its
Cost price 16 G x `1200 = 19,200
+propor.Ex. Of Consignor `24,000 x 16/800 = 480
+ “ Non Re of Consignee ` 24,000 x 16/800 = 480
Total loss :- 20,160
Insurance com. Pass amount ` 15,160 so actual loss is ` 5,000
Closing Stock: Total sent gezer 800
Less : Sale 720
loss 16 736
stock :- 64
Value of stock: 64 g x ` 1,600=1,02,400
+ propor.ex. Of Consignor
24,000 x 64/800 = 1,920
+Propor. Non rec. ex of
Consignee 24,000x64/800 = 1,920
1,06,240
- repair charge 1,800 = 1,04,4401,04,440
Bed debts:-
Bad debts count on
recommended sale
1,52,000 x .40 = 60,800
Slide-41

Share of Profit:
Suppose profit is ` 100
+ Con. Share ` 20
So total profit is `120
If `120 Profit : Consi.Share `20
So `3,25,440 “ : m
20 x 3,25,440
= ------------- -----
120
= ` 54,240
So profit of consignment A/c. is = `3,25,444 – 54,240
= `2,71,200.
Slide-41

Sem.:-I CC 103 Accountancy - I Consignment Accounts

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