Ramesh consigned 2,000 metric tonne of chemicals at a cost of ~ 800 per metric tonne to
Question:
Ramesh consigned 2,000 metric tonne of chemicals at a cost of ~ 800 per metric tonne to John. Ramesh paid freight and insurance charges of ~ 20,000. Of the above, 500 metric tonne of chemicals were destroyed by fire during transit. John cleared the balance of 1,500 metric tonne of chemicals and sold 1,000 metric tonne at an average price of ~ 1,000 per metric tonne John incurred the following expenses : Godown rent ~ 5,000; Insurance ~ 3,000; and Clearing charges ~ 4,500. Insurance claim received against fire ~ 4,00,000 after admitting the salvage value of stock destroyed by fire at ~ 10,000. John was entitled to a commission of 10% on sale proceeds. John sends the balance to Ramesh after adjusting his commission and expenses out of the sales proceeds.
Prepare a Consignment Account and Johns Account in the books of Ramesh.
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach