SEMESTER 1 FINANCIAL ACCOUNTING

CONSIGNMENT PROBLEMS

1. Mr. X sold goods for cash at 1,20,000 and credit at 54,000. One of the debtors failed to pay 5,000
and the remaining debtors were fully realized. The consignee is entitled to 10% ordinary and 5%
Del-credre commission.
Calculate the total commission due to consignee, and amount to be transferred to Profit & Loss
2. Mr. A of Bangalore sends goods costing 3,00,000 to Mr. B of Mumbai. Commission payable was
2% on sales plus 3% on sales as Del-credre commission. The entire goods were sold by Mr. B for
4,00,000. However, consignee is able to recover ₹ 3,95,000 from the debtors.Calculate total
commission payable to Mr. B, and amount to be transferred to Profit and loss account
3. Ram consigned 100 kg of apples to Laxman. The cost being 60 per kg. Ram incurred freight
charges of 8,000. The loss of 20% is unavoidable.
Calculate cost per kg of Apple
4. Mr. Ram Manohar of Mumbai sent 100 bicycles which cost 900 each to Gopal of Chennai on
consignment basis. Ram Manohar paid freight of 1,200, cartage 300 and Insurance 1400. In
Chennai, Gopal has spent 100 as cartage, loading and Unloading 50. The bicycles have been kept
in a godown at a monthly rent of 100. At the end of accounting period, 20 bicycles remained
unsold. The selling price of the bicycle is Rs. 1, 000 at Chennai. What should be the value of
closing stock
5. Goods consigned 500 Kg. at 20 per Kg. Freight and Carriage paid by the consignor 4,000.
Consignee sold 300 Kg. at 35 per Kg. and incurred 1,000 as unloading expenses, 2,000 as
godown rent and 1,000 as selling expenses. Normal loss due to leakage is 50 Kg in transit.
Calculate the value of closing stock
6. Ramesh of Bangalore consigned 4,000 boxes to Raghu of Delhi costing 150 each. Consigner's
expenses 5,000. 1/10th of the boxes were lost in consignee's godown and treated as normal loss
.2,400 boxes were sold by consignee. Calculate the value of closing stock
7. Raju consigned 50,000 units costing 5 each to Mr. Umesh. Mr. Raju incurred 10,000 for sending
the goods. 2,500 units were abnormally destroyed in transit. Mr. Umesh took delivery and paid
1,500 for bringing the goods to the godown. Consignee sold 30,000 units at 10 each. Consignee
paid selling expenses of 10,000. Calculate the value of closing stock.
8. Mr. Surendar consigned 20,000 units at 10 per unit to Dharani and incurred delivery expenses of
7,000. 1,000 units were destroyed in transit due to theft. 13,000 units were sold. 2,000 units
normally destroyed in the godown. Dharani incurred non-recurring expenses of 900.
9. Williams of Chennai consigned 300 chests of tea at 2,000 per chest to Johnson of New Delhi
paying freight ₹4,000 and other expenses 2,000. Johnson sold 250 chests at 2,500 per chest and
25 chest at 2,200 per chest for cash. Johnson spent for freight 3,000 and other expenses 1,000. He
remitted the amount due to Williams after deducting his commission at 5% (normal) 2½% (over-
riding) and + ½% (del credere commission to be given on total sales). Johnson found that one
customer to whom credit was allowed paid only 4,800 against ₹5,000 in full settlement. Other
customers paid the amount due. Pass journal entries in the books of consignor
10. On June 10, 2021, ABC & Co., Chennai consigned 500 cases of goods costing 150 each Sethi &
Co., Kolkata. On the same date, the consignor paid 2,500 for freight and carriage, 1,000 as
loading charges, and 1,200 for insurance. On July 1, 2021 the consignee paid 1,800 for clearing
charges, 1,750 for warehousing and storage charges, and * 900 for packing and selling expenses.
He also remitted a bank draft for 15,000 as an advance against the consignment; On July 5, 2021
 they sold 275 cases at 200 each. Sethi & Co. are entitled to 5% commission on the gross proceeds
of sales. It found that 50 cases have been lost in transit. Sethi & Co submitted an account sale on
10, 2021. Prepare the necessary ledger accounts in the books of the consignor.
11. On January 1st, 2021 Karnataka Sports, Bangalore consigned 180 cases of sports goods costing
360 each to Gemini Sports, Mumbai. They paid 360 for insurance and 1800 for freight. Gemini
Sports are entitled to a commission of 10% on gross sales.
Gemini Sports received the consignment on January 15th 2021 and sent a 60 days bill for 10,000
to Karnataka Sports. The bill was discounted for 9,900.
On opening the cases the consignee found 10 cases of wrong description and returned them, by
paying return freight of ₹ 400.
Gemini Sports sold 120 cases at 600 each for cash and 20 cases at 700 each on credit. Gemini
Sports spent 720 on clearing charges and 600 on carriage outwards. They incurred bad debts
amounting to 400. The accounts were settled on June 30th, and the balance remitted by cheque.
Show the necessary ledger accounts in the books of consignor.
12. In 1st June 2021 M. Coal Co. consigned to M. Sales Ltd. 2,000 tons of coal. The cost of coal and
railway freight were 750 and 2 per ton respectively. On 25th June, 2021, an Account sale was
received from M. Sales Ltd. showing that 1,000 tons sold at 16 a ton; Sales expenses 880,
Insurance 120, Brokerage 1 1/4% and commission 2 1/2 %. The consignee enclosed a bill for the
proceeds less expenses and reported a shortage of 40 tons on the whole consignment. Show
Consignment Account in the books of M Coal Company.
13. Gururaj & Co. of Delhi consigned on January 1, 2021, 50 cases of glassware costing 40,000 to
Singh & Co. of Kolkata for sale on commission at 5% on gross sale proceeds Gururaj & Co. paid
for freight and carriage and 600 for packing. Singh & Co. took the delivery of goods on January
5th, 2021 and paid 300 for clearing charges, 200 for carriage, 50 for miscellaneous expenses, and
100 for godown rent. They sold 15 cases at 1,000 each, 25 cases at 1,200 each and 10 cases at
1,100 each. On April 5th, 2021 Singh & Co. sent a bank draft for 15,000 to Gururaj & Co. on
account. On April 10th, 2021 Singh & Co. forwarded an Account Sales together with a bill
exchange for the balance due. Prepare the necessary ledger accounts in the books of both the
parties.
14. A Oil mills, Cochin consigned 2,500 kg. of castor oil to Madhu & Co., Varanasi in April 1, 2021.
The cost of oil was 18 per kg. The consignor paid 900 towards carriage, freight and insurance in
transit. During transit 250 kg. oil was accidentally destroyed in transit for which the insurance
company paid 2,200 in full settlement of the claim directly to the consignor.
Madhu & Co. took delivery of the consignment on April 10, 2021 and accepted a bill drawn on
by Deepak oil Mills of ₹ 5,000 for 2 months. On June 30, 2021, Madhu & Co. reports 1,750 kg.
were sold at 25 per kg. The expenses of the consignee were 1,850 towards godown rent,
advertisement and salaries of salesmen. Madhu & Co. charged a commission of 3% plus 2% del
credre commission. Madhu, & Co. further reported a loss of 20 kg. leakage in the consignee
godown. Prepare the necessary ledger accounts in the books of the consignor.

15. Ram of Ludhiana consigned 100 computer costing 20,000 each to Bahadur of Gauhati at 10%
above cost. Ram Traders incurred 500 for packing and other charges on each computer. The
consignee received the consignment by paying 1,500 for railway charges, 1,300 for insurance till
it reaches the godown and 200 for carriage. He submitted an Account Sales as follows:
20 Computers sold at 25,000 each f or cash
10 computers sold on credit at * 30,000 each
10 taken for his own stock at 25000 each
Consignee remitted the balance after deducting his commission at 10% on sales. Assuming that
original entries are made at invoice price and consignment stock is valued at inovice price, write
necessary accounts in the books of Ram Traders.
16. Nishanth of Mumbai consigned 100 Radio sets costing 500 each to Ramesh of Bangalore. The
invoice was made proforma at 600 per set. Ramesh was entitled to a commission of 7.5% on sales
and 2.5% del-credere commission and 10% of surplus sale proceeds over the invoice price.
Ramesh was to bear all expenses incurred after the goods reached his godown..While sending the
goods, Nishanth paid 1,500 as forwarding charges and insurance in transit. 10 radio sets were
damaged and Nishanth received 4,000 from insurance company. Ramesh took delivery of the
remaining radio sets by paying 4,500 as freight, cartage etc., Ramesh sold 70 radio sets at 800
each. 30 of them on credit, out of which the proceeds of 3 radio sets could not be recovered
because of the disappearance of the customers. He had spent ₹ 500 as storage and selling
expenses. Ramesh sent a bank draft for the amount due to Nishanth.
Prepare the important ledger accounts in the books of consignor