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Consignment Tutorial Questions_2021

Consignment topic

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Brian Abraham
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4 views

Consignment Tutorial Questions_2021

Consignment topic

Uploaded by

Brian Abraham
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CONSIGNMENT ACCOUNTING_SEMINAR QUESTIONS

QUESTION 1
Kadio sold goods on behalf of Kibacha on consignment
basis. On January 1, 2017, he had with him a stock of
TZS2,000,000 on consignment. Kadio had instruction to
sell the goods at cost plus 25% and was entitled to a
commission of 4% on sales. In addition, Kadio was
entitled to 1% Del credere commission on total sales for
guaranteeing collection of all the sales proceeds. During
the year ended 31st December, 2017, cash sales were
TZS12,000,000, credit sales TZS10,500,000 and Kadio’s
expenses relating to the consignment TZS300,000 being
salaries and insurance. Baddebts were TZS300,000 and
goods sent on consignment TZS20,000,000.
Required:
a) Prepare Consignment Account and Consignee’s
Account in the books of Kibacha
b) Prepare important Ledger accounts in the books of
Kadio.
QUESTION 2
Kazimoto of Dar es Salaam consigned goods on 1-1-2017
at invoice value of TZS12,500,000 which was made up by
adding 25% on cost, to Mwangota of Mbeya. Kazimoto
paid TZS300,000 as freight and TZS200,000 as insurance
on these goods. On 30-6-2017 Kazimoto received a
remittance of TZS7,000,000 with an Account Sales from
Mwangota showing that he had:
Sold 3/5 of goods for TZS9,000,000.
Paid TZS150,000 as landing charges and TZS250,000 as
selling expenses.
Retained his commission of 10% o7ross sales.
Required: Prepare the following accounts:
a) Consignment Account
b) Mwangota Personal A/c

QUESTION 3
Rienzo of Dar es salaam consigns 1000 cases of goods
costing TZS10,000 each to Rena of Arusha. Rienzo pays
the following expenses in connection with consignment:
TZS
Carriage 100,000
Freight 300,000
Loading charges 100,000
Rena sells 700 cases at TZS14,000 per case and incurs
the following expenses:
TZS
Clearing charges 85,000
Warehousing and storage 170,000
Packing and selling expenses 60,000
It is found that 50 cases have been lost in transit and 100
cases are still in transit. Rena is entitled to a commission
of 10% on gross sales.
Required: Prepare the following accounts:
a) Consignment account
b) Rena’s Account in the books of Rienzo

QUESTION 4
Kingo of Dar es salaam consigned 150 Radio sets at
TZS400,000 each to Renzo of Mwanza. He paid
TZS2,400,000 for freight and TZS400,000 for wages.
Renzo took delivery of the Radio sets and paid
TZS4,000,000 for other charges. The consignee accepted
a bill of TZS16,000,000 drawn by the Consignor for 3
months. The Consignee sent an account sale after two
months stating that he has sold 120 sets at TZS600,000
each and paid TZS1,000,000 for advertisement and other
selling expenses. The Consignee is entitled to a
commission of 4% on gross sale proceeds.
Required:
Prepare necessary journal entries in the books of Kingo
and prepare Consignment A/c.

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