Stone consigned goods to Rock on 1 January 19X8, their value being £12,000, and it was agreed that Rock should receive a commission of 5 per cent on gross sales. Expenses incurred by Stone for freight and insurance amount to £720. Stones financial year ended on 31 March 19X8, and an account sales made up to that date was received from Rock. This showed that 70 per cent of the goods had been sold for £10,600 but that up to 31 March 19X8, only £8,600 had been received by Rock in respect of these sales. Expenses in connection with the goods consigned were shown as being £350, and it was also shown that £245 had been incurred in connection with the goods sold. With the account sales, Rock sent a sight draft for the balance shown to be due, and Stone incurred bank charges of £12 on 10 April 19X8, in cashing same.

Stone received a further account sales from Rock made up to 30 June 19X8, and this showed that the remainder of the goods had been sold for £4,800 and that £200 had been incurred by way of selling expenses. It also showed that all cash due had been received with the exception of a debt for £120 which had proved to be bad. A sight draft for the balance due was sent with the account sales and the bank charged Stone £9 on 1 July 19X8, for cashing same. You are required to write up the necessary accounts in Stones books to record these transactions.

Answer rating: 100% (QA)

To record the transactions in Stones books we need to create the necessary accounts and update them based on the information provided Lets go through ... View the full answer