On October 1, 20X1, Superman Company shipped 50 units of its merchandise to Consuelo Company on consignment,
Question:
On October 1, 20X1, Superman Company shipped 50 units of its merchandise to Consuelo Company on consignment, the sets to be sold at an advertised price of P2,000. The cost of each unit to the consignor was P1,000. The cost of shipment paid by the consignor was P750. The consignor agreed to absorb consignee's expenditures for cartage and also to allow the consignee P100 for delivery and installation of each unit. Commission is to be 25% of sales price. On October 31, Consuelo submitted the following summary of consignment sales:
Units received 50
Units sold (16)
Units returned to consignor (defective) (4)
Units on hand 30
Oct 3 to Sales (16 units @ P2,000) P32,000
Oct 31 Charges:
Cartage in P1,000
Delivery and installation cost 1,600
Commission (25% of sales) 8,000 (10,600)
Balance P21,400
Remittance enclosed (5,000)
Balance owed (collections from customers not yet made) P16,400
Required
Compute the profit or loss on consignment.
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker