Consignment Accounting : How to solve problems on Consignment Accounting (Cost Price Basis)



Q1)  LG Ltd consigned 100 LED TV’s costing Rs 30000 each to Bright company Hassan on 01-01-2017. LG Ltd incurred packing charges at 12000, loading charges Rs 6000 and Insurance Rs 2000. During transit 8 LED TV’s damaged and Insurance company agreed to pay Rs 180000 as claim.
  Bright company received remaining and paid unloading charges Rs 9200, Advertisement Rs 3800 and ware housing charges Rs 5000.
  Bright company paid advance 10,00,000 through bill of Exchange. Agreement states 5% commission on sales. 72 LED TV’s were sold for 38000 each. Prepare ledgers in the books of both the parties. 
Calculation of Abnormal loss:

Cost of Damaged Goods
(No of Goods damaged X Cost price)                                                  (8 x 30000)  240000
Add: Non recurring expenses
By Consignor (LG Ltd.)
(12000  Packing + Rs 6000 Loading charges + 2000 Insurance)  20000/100×8=        1600
Total                                                                                                                          241600
Calculation of Consignment stock:
Cost of Unsold Goods
(No of Goods  X Cost price) (20 x 30000)     600000
Add: Non recurring expenses
By Consignor (LG Ltd.)      20000/100×20=       4000
By Consignee                         9200/92×20=        2000
Total                                                                606000
For complete solution watch the following video:

https://youtu.be/2ShMlHY5eC8

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