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Consignment Problem

The document outlines accounting exercises related to consignment inventory involving transactions between consignors and consignees. It includes specific journal entries for recording goods sent on consignment, sales, commission payments, and returning unsold inventory. Additionally, it presents scenarios for calculating consignment sales revenue and determining the number of books sold based on expenses and commissions deducted.

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7 views1 page

Consignment Problem

The document outlines accounting exercises related to consignment inventory involving transactions between consignors and consignees. It includes specific journal entries for recording goods sent on consignment, sales, commission payments, and returning unsold inventory. Additionally, it presents scenarios for calculating consignment sales revenue and determining the number of books sold based on expenses and commissions deducted.

Uploaded by

tongshie77
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

APC 316- Accounting for consignment inventory

Exercise Problem
A. Consignor: Handy Furniture
Consignee: Trendy Designs

 Handy sends P10,000 worth of tables to Trendy Designs on consignment.


 Trendy sells tables worth P6,000 to customers.
 Handy charges Trendy 80% of the sales value (P4,800), and the consignee earns a 20%
commission (P1,200).
 Trendy returns P4,000 worth of unsold tables to Handy.

Required: Prepare the journal entries for the following:


1. Recording goods sent on consignment
2. Recording sales
3. Recording commission payments
4. Returning unsold inventory

B. On October 20, 2025, Green Co. consigned 40 electric fans to Blue Corp for sale at
P1,000 each and paid P800 in transportation costs. On December 31, 2025 Blue
reported the sale of 10 electric fans and remitted P8,500. The remittance was net of the
agreed 15% commission. What amount should Green recognize as consignment sales
revenue for P2025?

C. In September 2025, Rex Co consigned 3,200 books costing P60 and retailing at P100
each to Rose Distributor, debiting Accounts Receivable and crediting Sales for the retail
price. Freight cost of P3,200 was debited to Freight Expenses by the consignor. On
September 30, 2025, Rex Co. received from Rose the amount of P142,020 in full
settlement of the balance due, and Accounts Receivable was credited for this amount.
The consignor deducted commission of P20 for each book sold, P180 for delivery
expenses and P200 for advertising expense. How many books were actually sold by
Rose?

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