(a) (b) Explain the differences between a consignment and a sale. 100 cases of goods costing...

 

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(a) (b) Explain the differences between a consignment and a sale. 100 cases of goods costing 3,500 were sent on consignment by X Limited to Y Limited on 1 February 19X7. At the same time, X Limited paid delivery expenses of 100 and insurance of 20. On 1 March 19X7 an interim account sales was received from Y Limited showing that 80 cases had been sold for 63 each and that storage charges of 180 and selling expenses of 100 had been deducted from the account. After also deducting the commission on sales which was agreed at 5 per cent of the gross sales, Y Limited settled the balance due to X Limited for goods sold by a bank draft. Required: (i) Prepare the interim account sales, and (ii) Prepare the consignment account in the books of X Limited. (a) (b) Explain the differences between a consignment and a sale. 100 cases of goods costing 3,500 were sent on consignment by X Limited to Y Limited on 1 February 19X7. At the same time, X Limited paid delivery expenses of 100 and insurance of 20. On 1 March 19X7 an interim account sales was received from Y Limited showing that 80 cases had been sold for 63 each and that storage charges of 180 and selling expenses of 100 had been deducted from the account. After also deducting the commission on sales which was agreed at 5 per cent of the gross sales, Y Limited settled the balance due to X Limited for goods sold by a bank draft. Required: (i) Prepare the interim account sales, and (ii) Prepare the consignment account in the books of X Limited.