On October 1, 2020, Sid Company consigned 240 posters to ABC Inc. with original cost of P1,000 each. Sid policy
On October 1, 2020, Sid Company consigned 240 posters to ABC Inc. with original cost of P1,000 each. Sid policy in setting its selling price is 160% mark-up on cost. Freight on shipment was paid by ABC Company for P12,000. Any costs incurred by the consignee in relation to the consigned goods are all reimbursable. On December 17, ABC Inc. submitted an account sales and remitted P230,400 after deducting 12% commissions, selling expense of P10,000 and any reimbursable cost. How much is the net income?
Assume further that 50% of the remaining posters were returned to Sid incurring freight of P5,000. Half of the returned goods were lost during the shipment. How much is the total loss and/or expenses accounted by Sid in relation to the consignment other than the Cost of Goods Sold? Determine the cost of ending inventory.