PROF. BHAMBWANI’S
RELIABLE CLASSES
CPT RECORDING LECTURES WORD FILE LECTURE WISE
CONSIGNMENT
LEC 1: THEORY (43.00 MINS)
LEC 2. (54.00 MINS)
On 1st Sept 1986, goods of the cost of Rs 2,64,000 were consigned by ShriShyamlal of Banglore to his agent Mahesh of Cochin at proforma invoice of 20% profit on cost price. ShriShyamlal paid insurance and other forwarding charges on consignment amounting to Rs 10,000. Shri Mahesh was allowed Rs 2,000 being establishment cost. He was entitled to 5% commission on gross sales and an additional 3% delcredere commission on credit sales only. Shri Mahesh made an expense of Rs2,040 as landing charges.
Three fourths of the goods were sold at 33 1/3% profit on cost, half of which were credit sales. One half of the balance of goods were destroyed by fire and a claim lodged for Rs.28,000 was settled at a discount of 10% The balance of goods were in stock. Show the consignment account and the stock lost on consignment account as on 31.12.86 in the books of ShriShyamlal.
LEC 3 (39.00 MINS)
Goods are invoiced by ShriAmar, consignor, to his agent Shri Ashok at selling price. The agent reports sales made and collection of book debts by him by monthly advice. He received 5% commission on cash collected plus allowance of expenses @ Rs.400 per annum.
During the half year ended 30.9.1995 goods were invoiced to the agent at a value of Rs 80,600. Such goods cost ShriAmar Rs 59,000 plus freight and packing charges thereon Rs 3,740. During the Same period, sales were made by the agent amounting to Rs 68,400. Debts collected were Rs 57,600 and discounts were allowed amounted to Rs.400. The agent remitted to ShriAmar Rs.56,000. Ashok spent Rs.2000 towards landing charges.
Some of the goods consigned to Shri Ashok were damaged in transit and a claim on the insurance company was settled for Rs.1,240.
On 30.9.1995 the stock in the hands of the agent and unsold represented a cost of ShriAmar Rs.8,200.
Prepare the consignment account and the account of Shri Ashok in the books of Shri
Amar, for the half year ended 30.9.1995.
LEC 4: (1 HOUR)
A co. Ltd. manufactures and deals in edible oil, consigned to their Banglore agent 1000 crates of oil, each crate containing 12 one kilo sachets) in March, 1991. The consignment was sent at 20% over the cost of Rs 30 per kilo. A bill was drawn on the agent for 80% of the value of the consignment which was met on presentation. Expenses incurred by the company by way of freight and insurance came to Rs 12,000.
The agent received the consignment by lorry and sold in March, 1991,900 crates at a profit margin of 25% on his cost. (excluding consignor's expenses ).
He found that 500 sachets had got damaged in transit - the manufacturer accepted this as a normal loss and these were sold to consumers at Rs 20 per sachet. The insurance Co. settled the loss claim for Rs 2,500.
Agent incurred expenses of Rs 5000 on his own account (unconnected with the liability under the agreement) and Rs 3,000 on consignor's account, he is entitled to a commission of 5% on sales effected by 15th April, 1991. the agent remitted the balance due by him to the company.
Draw the account in the books of A Co. Ltd to record the above transactions
LEC 5: (1 HOUR)
THEORY + PROBLEM
Niresh consigns 1,000 bats costing Rs 500 each to Swaroop for sales and incurs Rs 4,000 towards Freight and Rs 1,000 for insurance. Swaroop was able to take delivery of 900 bats only and 100 bats were destroyed in transit. Insurance Co. admitted the claim and paid the same. Swaroop will be entitled to a commission of 5% on sales, 2% delcredere commission on credit sales only. He will be entitled for additional commission of 25% of the excess if the sale price exceeds the cost price by more than 20% Swaroop has spent Rs 2,000 towards sales expenses. The sale account is as under
500 bats at Rs 600 per bat cash.
200 bats at Rs. 700 per bat credit.
Consignment debtors paid their dues except one customer to whom 4 bats sold for Rs 2,800 could pay only Rs 800.
Show consignment account, Consignment Debtor A/c, Swaroop A/c and commission calculations.
LEC 6: THEORY (14 MINS)
LEC 7: (16 MINS)
M/s Goswami Brothers were appointed Agents by Sunrise Ltd in 1987. You are given the following particulars relating to the year 1990-91. Rs.
i) Cost of goods despatche by the company on consignment 7,50,000
ii)Goods fully destoryed in Transit (original cost) 50,000
iii)Expenses incurred by the Company towards :
Freight 2,500
Insurance 1,500
iv) Expenses incurred by GoswamiBrothers : Rs
Landing & Clearing 1,500
Godown Rent 1,000
Transport charges 1,000
Advertisement 800
Insurance 800
v) Advance remitted by the Agent 1,50,000
vi)Bills Payable accepted 25,000
vii)Bad debts 3,000
viii)Goods destroyed by fire ( at original cost) in Agent's 35,000
godown
ix) Unsold stock with Agent at the close of the year ( at original
cost ) 50,000
x) Insurance claim recovered by the consignor towards the loss
in transit. 48,000
xi) Insurance claim recovered by the Agent Towards loss
by fire. 35,000
All sales are affected on 25% on the original cost.
The Agent is entitled to a Commission of 10% on gross sales.
You are required to show the Consignor's a/c. ( Sunrise Ltd) as would appear in the Books of Goswami Brothers.
LEC 8: (35 MINS)
X of Delhi purchased 10,000 meters of cloth for Rs. 2,00,000 of which 5,000 meters were sent on consignment to Y of Agra at the selling price of Rs. 30 per meters. X paid Rs. 5,000 for freight and Rs. 40 per meter and incurred Rs. 2,000 for selling expenses. Y is entitled to a commission of 5% on total sales proceeds plus further 20% on any surplus price realized over Rs. 30 per meters.
3,000 meters were sold at Delhi at Rs. 30 per meter less Rs. 3,000 for expenses and commission. Owing to fall in market price, the stock of cloth in hand is to be reduced by 10%.
Prepare the consignment account and Trading and Profit & loss account in the books of X & Y.
LEC 9: (23 MINS)
Rama consigned his goods to Ravindra his agent at New Delhi at cost price of Rs 40,000 Rama, an
accountant at the end of the year, drew up the agent accounts as under :
Ravindran,
Rs. Rs.
To Goods 40,000 By Cash 24,000
To Profit & Loss a/c 3,300 By Balance 19,300
------
43,300 43,300
======
Ravindran sold the goods for Rs.45,000 which exceeded by Rs.9,000 their invoice value. He collected Rs.38,000 after allowing discount of Rs.2,000 to customers. Bad debts come to Rs.1,000 and his expenses to Rs.800. Ravindran was entitled to a 5% commission on cash collected. Balance of stock is to be valued at invoice prices.
From the above information draw the accounts of Ravindran, consignment and consignment debtors in the books of Rama.
LEC 10: THEORY (1 HOUR)
LEC 11: THEORY (17 MINS)
LEC 12: OBJECTIVES (43 MINS)
1.Consignment account is a:
a)Personal accountb)Real account
c)Nominal accountd)Profit & Loss A/c
2.A invoiced certain goods so as to show a profit of 20% on invoice price 1/10th of the goods were lost in transit. The cost price of goods lost is Rs.40,000. The invoice value of goods sent out is:
a)Rs.5,00,000b)Rs.4,80,000c)Rs.4,50,000d)Rs.4,00,000
3.P sent out goods costing Rs.45,000 to Y at cost + 33-f¼%. 1/10th of goods were lost in transit. 2/3rd of the balance goods are sold at 20% above IP. The amount of sale value will be:
a)Rs.54,000b)Rs.43,200c)Rs.60,000 d) Rs.36,000
4.X sends out goods costing Rs.2,00,000 to Y.3/5th of the goods were sold by consignee for Rs.1,40,000.
Commission 2% on sales plus 20% of gross sales less all commission exceeds cost price. The amount of commission will be:
a)Rs.5,667b) Rs.5,800 c)Rs.6,000d)Rs.5,600
5.A sends out goods costing Rs.2,00,000 to B. Consignor’s expenses Rs.5,000. Consignee’s expenses in relation to sales Rs.3000. 4/5th of the goods were sold at 20% above cost. The profit on consignment will be:
a)Rs.25,000b)Rs.31,000 c) Rs.25,200d) Rs.5,000
6.X sends out 200 boxes to Y costing Rs.100 each. Consignor’s expenses Rs.4000. Consignee’s non-recurring expenses Rs.900. 1/10th of the boxes were lost in transit. 2/3rd of the boxes received by consignee were sold for Rs.20,000. The amount of consignment stock will be:
a)Rs.7,200b)Rs.7,500c)Rs.7,000d) Rs.6,000
7.X consigns 500 bags to Y costing Rs.400 each at an inflated price of Rs.450 each. Consignor’s expenses Rs.4000. Consignee’s expenses freight Rs. 1000, selling Rs.2000, 400 bags were sold. The amount of stock reserve will be:
a)Rs.5,000b)Nilc)Rs.10,000d)Rs.10,200
8.The risk of stock on consignment lies with
a)Consignorb)Consigneec)Buyerd)Seller
9.X sends out 4000 boxes to Y costing Rs.100 each. Consignor’ s expenses 10,000. 1/10th of boxes were lost in consignee’s godown and treated as normal loss. 2400 boxes were sold by consignee. The value of consignment stock will be:
a)Rs.1,36,667b)Rs.1,23,000c) Rs.1,20,000 d)Rs.1,20,500
10.X sends out goods costing Rs.3,00,000 to Y at cost plus 25%, consignor’s expenses Rs.5000. 1/10th of goods were lost in transit. Insurance claim received Rs.3000. The net loss on account of abnormal loss is:
a)Rs.27,500b)Rs.25,500c)Rs.30,500d) Rs.38,000
11.Account Sales indicates:
a)The net amount due from consignor to consignee by way of commission
b)The net amount due from consignee to consignor
c)Net sales effected by consignee
d)None of these
12.Goods sent on consignment account is a:
a)Personal accountb)Real account c)Nominal accountd)Sales A/c
13.The abnormal loss on consignment is credited to:
a)Consignment A/cb)Profit & Loss A/c
c)Consignee’s personal A/cd)All of the above
14.A proforma invoice is sent by:
a)Consignee to consignorb)Consignor to consignee
c)Debtors to consignee d)Debtors to consignor
15.X sent out certain goods to Y. 1/10th of goods were lost in transit. Invoice value of goods lost is Rs.12,500. Invoice value of goods sent out on consignment will be:
a) Rs.1,20,000b) Rs.1,25,000c) Rs.1,40,000 d) Rs.1,00,000
16.Suresh consigned 600 fans to Naresh to be sold at his risk. The cost of each fan is Rs.300. Suresh paid Rs.6000 as freight. Naresh paid Rs.1500 for octroi; Rs.3500 for godown rent. 500 fans were sold for Rs.1,80,000. Naresh was entitled to 4% commission on sale @ Rs.350 per fan and 20% of any surplus price realized profit on consignment will be:
a)Rs.12,250b) Rs.12,000 c)Rs.14,000 d) Rs.15,000
LEC 13: OBJECTIVES (1 HOUR)
17.Commission provided by the consignor to the consignee to promote credit sale is know as:
a)Ordinary commissionb)Delcredere commission
c)Over – riding commissiond)Special commission
18.If no del – credere commission is paid to the consignee, ______account will be debited for credit sale:
a)Consignment accountb)Consignee account
c)Consignor accountd)Consignment debtors account
19.On 1st Sept. 2006 goods costing Rs.33,000 were consigned by X to his agent Y at a proforma price which was cost plus one sixth profit on invoice price. What is the invoice price of goods:
a)Rs.39,000b)Rs.39,600c)Rs.40,000d) Rs.45,000
20.Overriding commission is calculated on:
a)Cash Salesb)Credit Sales only
c)Total Sales d)Credit Sales less Cash sale
21.What entry is required to be passed to nullify the effect of Loading:
a)Goods sent on consignment A/cDr.
To Trading A/c
b)Goods sent on consignment A/cDr.
To Consignment A/c
c)Consignment A/cDr.
To Goods sent on consignment A/c
d)none
22.If the delcredere commission is 10%, cash sales is Rs.5,000 and credit sales is Rs.10,000. Calculate the amount of delcredere commission.
a)1,500b)1,000c)500d)none
23.The Stock lying unsold with the consignee belongs to:
a)Consignor b)Consignee as he bears the risk
c)Both (a) and (b) d)None of these
24.J of Jaipur sends 500 radios @ Rs.200 each to D of Delhi. All the radios are sold by D at a profit of 25% on cost. D is entitled to a commission of Rs.25 per radio sold plus 20% of gross sale proceeds as exceeds an amount calculated @ 20% profit on cost. Calculate commission.
a)Rs.12,500b)Rs.13,500c) Rs.11,500 d) Rs.10,500
25.A sends 1000 units @ Rs. 56 to be sold on consignment basis. Consignor expenses amounted to Rs. 1000. 50 units were cost in transit. Find the new price per unit. (Loss is unavoidable).
(a)Rs. 50 per unit(b)Rs. 60 per unit
(c)Rs. 58.95 per unit(d)Rs 57. per unit
26.A consigned 1000 litres of coconut oil @ Rs. 50 per lt. to B. The normal loss is estimated at 5% the profit was fixed at 14% on the total cost. What is the sale price per litre?
(a)Rs. 57(b)Rs. 60(c)Rs. 7(d)Rs.55
27.The revenue for the transaction of consignment sales is recognized-
(a)When the goods are sold to customers by consignee.
(b)When the goods are sent to consignee.
(c)When the advance against delivery is received by consignor.
(d)When consignor receives the payment from consignee.
28.X Ltd. sends 5,000 bags of cement on consignment to Y Ltd. The Cost per bag is Rs.40. The Carriage Inward in Rs.25,000. It is estimated that the normal loss rate is 10%. Calculate the cost per bag?
(a)Rs.45(b)Rs.45.50(c)Rs.50.00(d)Rs.40.00
29.The balances of “goods sent on consignment account” is transferred to:-
(a)Trading Account(b)Profit and Loss Account
(c)Consignment Account(d)Consignee’s Account
1.Which of the following statement is not true: (Volume 1- M. Paper 1)
(a)If del-credere’s commission is allowed, bad debt will not be recorded in the books of consignor
(b)If del-credere’s commission is allowed, bad debt will be debited in consignment account
(c)Del-credere’s commission is allowed by consignor to consignee
(d)Del-credere’s commission is generally given to promote credit sales
2.The owner of the consignment stock is ______(Volume 1- M. Paper 1)
(a)Consignor(b)Consignee(c)Debtors( d)None
3.X of Kolkata sends out goods costing Rs.3,00,000 to Y of Mumbai at cost + 25%. Consignor’s expenses Rs.5,000. 1/10th of the goods were lost in transit. Insurance claim received Rs.3,000. The net loss on account of abnormal loss is
(Volume 1- M. Paper 1)
(a)Rs.27,500(b)Rs.25,500(c)Rs.30,500(d)Rs.27,000
4.X sent out certain goods to Y of Delhi. 1/10 of the goods were lost in transit. Invoice value of goods lost Rs.12,500. Invoice value of goods sent out on consignment will be: (Volume 1- M. Paper 1)
(a)Rs.120,000(b)Rs.125,000
(c)Rs.140,000(d)Rs.100,000
5.P of Faridabad sent out goods costing Rs.45,000 to Y of Delhi at cost + 331/3%. 1/10th of goods were lost in transit. 2/3rd of the goods received are sold at 20% above invoice price. The amount of sale value will be: (Volume 1- M. Paper 1)
(a)Rs.54,000(b)Rs.43,200(c)Rs.60,000(d)Rs.36,000
6.X of Kolkata sends out goods costing Rs.1,00,000 to consignee Y of Delhi. 3/5th of the goods were sold by consignee for Rs.70,000. Commission 2% on sales plus 20% of gross sales less all commission exceeds cost price. The amount of Commission will be: (Volume 1- M. Paper 2)
(a)Rs.2,833(b)Rs.2,900(c)Rs.3000(d)Rs.2,800
7.Rahim of Kolkata sends out 1,000 boxes to Ram of Delhi costing Rs.100 each at an Invoice Price of Rs.120 each. Goods send out on consignment to be credited in general trading account will be: (Volume 1- M. Paper 2)
(a)Rs.1,00,000(b)Rs.1,20,000
(c)Rs.20,000(d)None of the above
8.Goods sent out on consignment Rs.2,00,000. Consignor’s expenses Rs.5,000. Consignee’s expenses Rs.2,000. Cash sales Rs.1,00,000, credit sales Rs.1,10,000. Consignment stock Rs.40,000. Ordinary commission payable to consignee Rs.3,000. Del-credere commission Rs.2,000. The amount irrecoverable from customer Rs.2,000. What will be the profit on consignment? (Volume 1- M. Paper 2)
(a)Rs.38,000(b)Rs.40,000(c)Rs.36,000(d)Rs,43,000
9.A of Kolkata sends out 500 boxes to B of Delhi costing Rs.200 each. Consignor’s expenses Rs.5000. 1/5th of the boxes were still in transit. 3/4th of the goods received by consignee, were sold. The value of goods still in transit will be:
(Volume 1- M. Paper 2)
(a)Rs.20,000(b)Rs.21,000(c)Rs.21,200(d)None of the above
10.A and B entered into joint venture for equal profits. A purchased 1,000 kg of rice costing Rs.200 each. Carriage Rs.2,000, insurance Rs.3,000. 4/5th of the boxes were sold by B at Rs.250 per boxes. Remaining stock were taken over by B at cost. The amount of stock taken over by B at cost. The amount of stock taken over will be (Volume 1- M. Paper 3)
(a)Rs.40,000(b)Rs.41,000(c)Rs.50,000(d)Rs.50,200
11.X of Kolkata sends out certain goods at cost + 25%. Invoice value of goods sends out Rs.2,00,000. 4/5th of the goods were sold by consignee at Rs.1,76,000. Commission 2% upto invoice value and 10% of any surplus above invoice value.
The amount of commission will be: (Volume 1- M. Paper 3)
(a)Rs.4,800(b)Rs.5,200(c)Rs.3,200(d)Rs.1,600
12.Commission provided by the consignor to the consignee to promote credit sale is known as ______. (Volume 1- M. Paper 5)
(a)Ordinary commission(b)Del-credere commission
(c)Over riding commission(d)Special commission
13.______is unavoidable and should be spread over the entire consignment while valuing consignment stock (Volume 1- M. Paper 5)
(a)Abnormal loss(b)Normal loss
(c)Extra-ordinary loss(d)None of the three
14.Sujal consigned goods costing Rs.2,50,000 to Mridul on 1st January 2010 by incurring Rs.20.000 on freight. Some goods were lost in transit. For remaining goods Mridul spend Rs. 15,000 to take the delivery including storage charges. During the quarter.Mridul sold 3/4 of the goods received by him for Rs.3,00,000 and charged commission @ 10% on it to sujal. At the end of the quarter, Sujal asked the details of goods lost, sold, expenses commission and balance due to him alongwith the consignment stock from Mridul. As desired, Mridul sent the periodical detail statement commonly known as (Volume 1- M. Paper 5)
(a)Account statement(b)Account sales
(c)Statement of affairs(d)Summary statement
15.X of Kolkata sent out 2,000 boxes costing 100 each with the instruction that sales are to be made at cost + 45%. X draws a bill on Y for an amount equivalent to 60% of sales value. The amount of bill will be (Volume 1- M. Paper 5)
(a)Rs.1,74,000 (b)Rs.2,00,000 (c)Rs.2,90,000(d)Rs.1,20,000
16.A consignee sold goods costing Rs.50,000 at a profit of Rs.10,000. Out of total sales, 30% was credit sale. As per the agreement the consignee will get 5% ordinary commission, 2% del-credere commission on credit sale and 3% over-riding commission on amount in excess of cost price. The amount of commission will be
(Volume 1- M. Paper 5)
(a)Rs.3,360(b)Rs.3,660(c)Rs.4,500(d)Rs.3,000
17.Fena sent out certain goods to Kena of Delhi. 1/10 of the goods were lost in transit. Invoice value of goods lost Rs.25,000. Invoice value of goods sent out on consignment will be: (Volume 1- M. Paper 5)
(a)Rs.2,50,000(b)Rs.25,000(c)Rs.2,500(d)Rs.1,25,000
18.Deepak consigned 100 sets of TVs to Sudeep @ Rs.10,000 each. 5 TVs were damaged in transit due to unavoidable reason whose price was adjusted in the remaining TVs. The new price of each TV will be (Volume 1- M. Paper 5)
(a)Rs.10,000(b)Rs.10,200(c)Rs.15,000(d)Rs.10,526
19.Proforma invoice is a statement of information in the form of invoice prepared by the _____ to appraise the ______about certain essential particulars of the goods. (Volume 1- M. Paper 6)
(a)Consignee, Consignor(b)Buyer/Seller
(c)Consignor, Consignee(d)None of the above
20.Mr. Yatharth consigned to Mr. Ramesh 100 cases of tea costing Rs.100 per case. He paid Rs.1,000 as freight and cartage. Mr. Ramesh could take delivery of only 90 cases since 10 cases were loss in transit. The amount of abnormal loss will be ______(Volume 1- M. Paper 6)
(a)Rs.1,000(b)Rs.1,100(c)Rs.1,050(d)None of the these
Lec 14: (56 MINS)
21.Goods costing Rs.4,80,000 were sent on consignment basis. Goods are invoiced at 125% of the price. The invoice price and the loading will be: (Volume 1- M. Paper 6)
(a) Rs.6,00,000 and Rs.1,00,000(b)Rs.5,00,000 and Rs.1,00,000
(c) Rs.6,00,000 and Rs. 1,20,000(d)Rs.5,00,000 and Rs.1,20,000
22.Mr. A sent 250 units costing Rs.10,000 each to Mr. B. sold 150 units @ Rs.14,200 per unit on credit and 75 units @ Rs.14,000 for cash. Mr. B is entitled to a commission Rs.500 per unit. The amount of commission will be: (Volume 1- M. Paper 6)
(a)Rs.75,000(b)37,500(c)Rs.1,12,500(d)Rs.85,000
23.Goods costing Rs.1,20,000 were sent on consignment basis. These goods are invoiced to give a gross margin of 20% on invoice price. The amount of loading is:
(Volume 1- M. Paper 6)
(a)Rs.24,000(b)Rs.30,000(c)Rs.20,000(d)None of the above
24.In case of del-credere commission provided by consignor to consignee, bad debts is a loss of ______(Volume 1- M. Paper 7)
(a)Consignee(b)Consignor
(c)Both consignor and consignee(d)Neither of the two
25.M/s MittalSen & Co. sends goods costing Rs.50,000 to M/s SunejaJadeja & Co. for sale at invoice price. The invoice price of the goods was Rs.60,000. Former spends Rs.2,000 on freight for sending the delivery and later spends Rs.1,500 for receiving the delivery. M/s SunejaJadeja & Co. sold 90% of goods at invoice price and earned a commission of Rs.5,400. In the due course he made some credit sales also out of which some amount were proved to be bad and was borne by him only. Remaining goods were taken back by M/s MittalSen & Co. The balance due was paid by M/s SunejaJadeja & Co. through a demand draft. The above transactions are in the nature of: (Volume 1- M. Paper 7)
(a)Consignment(b)Joint venture
(c)Sale of goods on sale or return basis(d)Credit sales
26.Expenses incurred by the consignor on sending the goods to the consignee is Rs.1,000 for insurance, Rs.1,500 on freight and Rs.500 on packing the goods. While expenses incurred by the consignee on behalf of the consignment are Rs.800 on octroi, Rs.600 as godown charges and Rs.1,200 as selling expenses. The amount to be excluded while calculating consignment stock will be: (Volume 1- M. Paper 7)
(a)Rs.2,600(b)Rs.600(c)Rs.1,200(d)Rs.1,800
27.Goods costing Rs.10,000 sent out to consignee at Cost + 25%. Invoice value of the goods will be (Volume 1- M. Paper 8)
(a)Rs.12,500(b)Rs.12,000(c)Rs.10,000(d)None of the above
28.Mr. A consigned goods costing Rs.2,50,000 to Mr. B at an invoice price of Rs.3,00,000. The goods were to be sold at invoice price or above. Mr. B sold some of the goods at invoice price of Rs.2,00,000 and some at 10% above cost i.e Rs.1,10,000. For this he gets 5% commission. The amount of commission is (Volume 1- M. Paper 9)