Mr Krishna Murty requests you to prepare a Consignment Account for the year ended 30.6.2017 and for this purpose
gives you the following information to ascertain the profit earned on consignment.
(i) Agent’s commission @ 5% on gross sales Rs. 20,000.
(ii) Cost of goods fully damaged in transit (insurance claim recovered Rs. 18,000).
(iii) Expenses incurred by the agent : godown rent Rs. 400; landing and clearing Rs. 1,000; advertisements Rs. 200;
transport charges Rs. 900; selling expenses Rs. 1,000.
(iv) Freight expenses incurred by Krishna Murty Rs.2,000.
(v) Cost of unsold stock lying with the agent at the end of the year Rs. 60,000.
All sales were effected by the agent at a profit of 25% on cost.