DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name of the Participant ` : CH. ANURADHA
Designation : Lecturer
Branch : Commercial & Computer Practice
Institute : Govt. Polytechnic for women,
Bheemunipatnam
Year/Semester : IV semester
Subject : Accountancy-III
Sub-code : CCP-402
Topic : CONSIGNMENT ACCOUNTS
Sub Topic : Exercises on Consignment
Accounts
Duration : 50 Minutes
Teaching aids : PPT, ANIMATION

CCP402.13 to 15 1
Recap

In the last class, we discussed about

 preparation of Consignment Accounts with

 Normal Loss

 Abnormal Loss

CCP402.13 to 15 2
Illustration
 1,000 cycles were consigned by X&Co. of Delhi to Y&Co.
of Hyd @ Rs.150 each
 X&Co. paid freight Rs.10,000, Insurance Rs.1,500
 During transit 100 cycles were damaged
 Y&Co. took delivery of remaining cycles
 Y&Co. sent D.D. of Rs.50,000 towards advance

CCP402.13 to 15 3
Illustration contd.

Account Sales showed:

 800 cycles sold @Rs.220 each

 Expenses of Y&Co. Rs.2,000 for rent

 Commission to Y&Co. 5%

 Prepare the necessary ledger accounts

CCP402.13 to 15 4
 Solution
Dr Consignment Account Cr.
Particulars Amount Particulars Amount

To Goods sent on con. 1,50,000 By Y&Co. (Sales) 1,76,000

To Bank a/c 11,500 By Con. Stock 16,150
To Y&Co. (expenses) 2,000 By Abnormal Loss 16,150
To Y&Co. 8,800
(commission) 36,000
To P&L a/c
2,08,300 2,08,300

CCP402.13 to 15 5
 Solution contd.
Dr Y & Co. Account Cr.
Particulars Amount Particulars Amount

To Consignment a/c 1,76,000 By Consignment 2,000

a/c 8,800
By Commission a/c 50,000
By Bank 1,15,200
By Balance c/d
1,76,000 1,76,000

CCP402.13 to 15 6
 Solution contd.
Dr Profit and Loss a/c Cr.
Particulars Amount Particulars Amount
To Abnormal Loss a/c 16,150 By Consignment 36,000
a/c

CCP402.13 to 15 7
Solution contd.
Working Notes:
1. Abnormal Loss:
Cost of damaged goods = 150 X 100 = 15,000
Add: Proportionate exps.
= 11,500 X 100/1,000 = 1,150

16,150
2. Unsold Stock:
Cost of 100 cycles = 150 X 100 = 15,000
Add: Proportionate exps.
= 11,500 X 100/1,000 = 1,150

16,150

CCP402.13 to 15 8
Exercise No: 1

 Krishna of Mumbai and Gopal of Chennai

 are in Consignment business
 Gopal sent goods to Krishna Rs.10,000/-
 Gopal paid
 freight Rs.500/-
 Insurance Rs.1,500/-

CCP402.13 to 15 9
Account sales received from Consignee showing
 Gross sales Rs.20,000/-

 Selling Expenses Rs.900/-

 Commission 5%

Consignor received bank draft for the balance due

CCP402.13 to 15 10
 Pass journal entries &

 Show necessary Ledger Accounts

 In the books of both the parties

CCP402.13 to 15 11
Answer:

 Profit on consignment = Rs.6,100/-

 Bank draft received for the balance = Rs.18,100/-

CCP402.13 to 15 12
Exercise No.2
 Varma of Vijayawada consigned goods
 worth Rs.20,000/- to Amritha of Ahamedabad
 The Consignor paid forwarding charges
Rs.1,000/-
 Drew a bill on Amritha for Rs.10,000/-
 Bill discounted with the banker at Rs.9,500/-

CCP402.13 to 15 13
Account sales received from Consignee showing

 Gross sale proceeds Rs.28,000/-

 Commission Rs.2,000/-

Consignor received bank draft for the balance

amount.

CCP402.13 to 15 14
 Pass journal entries &

 show necessary Ledger Accounts

 in the books of both the parties

CCP402.13 to 15 15
Answer:

 Profit on consignment = Rs.5,000/-

 Bank draft received for the balance = Rs.16,000/-

CCP402.13 to 15 16
Exercise No.3
 Madan of Chennai consigned goods
 worth Rs.15,000/- to Ganesh of Gudivada
 The Consignor paid
 Freight Rs.400
 Packing and Forwarding charges Rs.200/-
 Ganesh accepted a bill for Rs.5000/-

CCP402.13 to 15 17
Account sales received from Consignee showing

 Cash sales Rs.10,000/-

 Credit sales Rs.8,000/-

 Indirect expenses Rs.600/-

 Commission 4%

 Delcredre Commission 2%

Consignor received bank draft for the balance amount

CCP402.13 to 15 18
 Pass journal entries &

 Show necessary Ledger Accounts

 In the books of both the parties

CCP402.13 to 15 19
Answer:
 Profit on consignment = Rs.720/-
 Bank draft received for the balance = Rs.11,320/-

CCP402.13 to 15 20
Exercise No.4
 Balu of Bandar consigned goods
 150 cycles @ Rs.500/- but invoiced @ Rs.600/-
 to Ramana of Repalle
 Ramana accepted balu’s bill for Rs.30,000/-
 The Consignor paid
 Packaging & dispatch Rs.750/-

CCP402.13 to 15 21
Account sales received from Consignee showing

 Gross sale proceeds of 120 cycles @ Rs.600/-

 Expenses on freight Rs.1,750/-
 Ordinary commission @ 5% and
 Delcredre Commission @ 2%

Consignor received bank draft for the balance due

CCP402.13 to 15 22
 Pass journal entries &

 show necessary Ledger Accounts

 In the books of both the parties

CCP402.13 to 15 23
Answer:
 Stock on Consignment = Rs.18,500/-

 Profit on consignment = Rs.4,960/-

 Bank draft received for the balance = Rs.35,210/-

CCP402.13 to 15 24
Exercise No.5
 Sudha of Sri Nagar consigned goods
 costing Rs.20,000/- to Indira of Warangal
 Sudha paid cartage & other charges Rs.1,500/-

CCP402.13 to 15 25
Account sales received from Consignee showing

 Half of the goods were sold for Rs.15,000/-

 Expenses Rs.750/-

 Commission 5%

Bank draft enclosed for the balance due

CCP402.13 to 15 26
 Prepare account sales &

 Show necessary Ledger Accounts

 In the books of both the parties

CCP402.13 to 15 27
Answer:

 Profit on consignment = Rs.2,750/-

 Stock on consignment = Rs.10,750

 Bank draft received for the balance = Rs.13,500/-

CCP402.13 to 15 28
Exercise No.6

 Charan of Kolkata consigned goods

 250 cases of Ayurvedic Medicine @ Rs.300/-
 but invoiced @ Rs.400/-
 to Rama of Ayodhya
 The Consignor paid
 Packing and carriage Rs.250/-

CCP402.13 to 15 29
Account sales received from Consignee showing

 Gross sale proceeds of 200 cases @ Rs.400/-

 Expenses on

 Freight Rs.600/-

 Godown Rent Rs.350/- &

 Insurance of Godown Rs.200/-

 Commission 5%

CCP402.13 to 15 30
 Pass journal entries &

 Show necessary Ledger Accounts

 In the books of both the parties

CCP402.13 to 15 31
Answer:

 Profit on consignment = Rs.14,770/-

 Stock on consignment = Rs.20,170/-

 Bank draft received for the balance = Rs.74,850/-

CCP402.13 to 15 32
Exercise No.7

 Radio house of Delhi consigned goods

 200 radios @ Rs.400 but invoiced @ Rs.450/-
 to Rama of Ayodhya
 The Consignor paid Freight and Insurance Rs.5,000/-
 Rama accepted 3 months bill drawn by Radio house
for Rs.50,000/-

CCP402.13 to 15 33
Account sales received from Consignee showing

 Gross sale proceeds of 180 radios @ Rs.500/-

 Expenses on

 Godown Rent Rs.2,200/- &

 Advertisement Rs.1,300/-

 Commission 5%

CCP402.13 to 15 34
 Pass journal entries &

 Show necessary Ledger Accounts

 In the books of both the parties

CCP402.13 to 15 35
Answer:

 Profit on consignment = Rs.5,500/-

 Stock on consignment = Rs.9,500

 Bank draft received for the balance = Rs.32,000/-

CCP402.13 to 15 36
Exercise No. 8
 Radha consigned goods
 costing Rs.10,000/- and invoiced the same at
 20% above cost
 to Krishna of Brindavan
 The Consignor paid
 Rs,240/- for freight and cartage
 Rs.160/- for insurance
 Radha drew a bill on Shyam for Rs.4,000/-
 and discounted the bill for Rs.3,950/-
CCP402.13 to 15 37
Answer:

 Profit on consignment = Rs.1,650/-

 Stock on consignment = Rs.3,100

 Bank draft received for the balance = Rs.5,450/-

CCP402.13 to 15 38
Exercise No.9

 Gopi & Co., consigned goods

 200 tones of coconut oil at a cost of Rs.15,000/-
 to Krishna traders of Brindavan
 The Consignor paid
 Rs.4,600/- for freight and cartage
 Krishna traders sold 100 tons and reported a
shortage of 4 tons on the whole consignment
 Calculate the value of stock at the end

CCP402.13 to 15 39
Answer:

 Stock on consignment = Rs.3,100/-

CCP402.13 to 15 40
Exercise No. 9
 Kantha of Kanpur consigned goods
 1000 transistors @ Rs.70/- to Mohan of Madhurai
 The Consignor paid freight Rs.1050/-
 Mohan received only 900 sets and incurred
Rs.10,000/- on octroi, Rs.500/- on carriage and
Rs.600/- selling expenses
 Consignee sold 600 sets only and reported a
shortage of 4 tons on the whole consignment
 Calculate the value of stock at the end
CCP402.13 to 15 41
Answer:

 Stock on consignment = Rs.24,185/-

CCP402.13 to 15 42
Exercise No. 10

 500 cycles were consigned by Madhu & Co.,

 @ Rs.150/- to Sundar & Co.,
 The Consignor paid freight Rs.5,000/- and insurance
in transit Rs.750/-
 During the transit 50 cycles were totally
 damaged by fire
 Sundar & Co took delivery of remaining cycles
 and paid Rs.765/- for Octroi.

CCP402.13 to 15 43
Account sales received from Consignee showing

 400 cycles were sold @ Rs.220/-

 Rs.25,000/- advance paid
 Expenses incurred Rs.1,000/-
 Commission 5%

 Prepare consignment a/c, abnormal loss a/c &

 Consignee’s a/c in the books of Consignor

CCP402.13 to 15 44
Answer:

 Profit on consignment = Rs.17,320/-

 Balance due = Rs.56,835/-

 Stock on consignment = Rs.8,160/-

 Abnormal Loss = Rs.8,075/-

CCP402.13 to 15 45
Assignment:
 Do prepare on Consignment Accounts

 Exercises without invoice price

 Exercises with invoice price

 Exercises with unsold stock

 Exercises with Normal &

 Exercises with Abnormal Loss

CCP402.13 to 15 46
Frequently asked questions

1) What is consignment/define consignment

2) What are the parties to consignment? Explain
3) What do you know about consignor & consignee
4) What is the difference between consignment & sale

CCP402.13 to 15 47
1) What is account sales
2) Give the specimen of account sales
3) Explain commission and delcredre
commission
4) What is Invoice price

CCP402.13 to 15 48