MILLAN

DAYAG

PROBLEM 1
Northup Company
No. of units sold
MULTIPLY BY: Sale price per unit
Sales revenue of consig

On December 30, the sa

Revenue is recognized o

On November 30, the c

No revenue is recognize

ANSWER: A.

PROBLEMS 2-3
JBD, Inc.
[2.] Freight charge on consi
DIVIDE BY: No. of units consigned
Freight allocated per un

Sale price per unit

LESS: Cost per unit
Freight per unit, as add
Gross profit per unit
MULTIPLY BY: No. of units sold
Gross profit on consign
 Sale price per unit
MULTIPLY BY: No. of units sold
Revenue on consignme
MULTIPLY BY: Commission rate based
Commission expense

Gross profit on consign

LESS: Commission rate based
Operating expenses
Net income on consign

ANSWER: B.

[3.] Product cost per unit

ADD: Freight allocated per un
Total inventoriable cost

Total units consigned

LESS: Units sold
Consigned units unsold
MULTIPLY BY: Total inventoriable cost
Total cost of unsold un

ANSWER: B.

PROBLEMS 4-5
Bruce Company
[4.] Freight-out
ADD: Freight-in
Freight charge on consi
DIVIDE BY: No. of units consigned
Freight allocated per un

Product cost per unit

ADD: Freight allocated per un
Total inventoriable cost

Total units consigned

LESS: Units sold
Units returned to consi
Consigned units unsold
MULTIPLY BY: Total inventoriable cost
Total cost of unsold un

ANSWER: D.
 [5.] Units sold
ADD: Units returned to consi
Units to absorb freight

Freight allocated per un

MULTIPLY BY: Units to absorb freight
Freight cost of sales

Sale price per unit

MULTIPLY BY: Units sold
Revenue on consignme
MULTIPLY BY: Commission rate based
Commission expense

Product cost per unit

ADD: Delivery and installation
Total product cost per un
MULTIPLY BY: Units sold
Total cost of sales exclu

Revenue on consignme
LESS: Total cost of sales exclu
Freight cost of sales
Commission expense
Net income of consigno

ANSWER: C.

PROBLEMS 6-8
Western Appliance Center
[6.] Freight charge on consi
DIVIDE BY: No. of units consigned
Freight allocated per un

Product cost per unit

ADD: Freight allocated per un
Total inventoriable cost

Total units consigned

LESS: Units sold

Consigned units unsold

MULTIPLY BY: Total inventoriable cost
Total cost of unsold un
 ANSWER: B.

[7.]
Down payment
ADD: Collection during
Collections per consign
MULTIPLY BY: Units sold in each mont
Total collections per co
TOTAL
MULTIPLY BY: Commission rate
Amount to be deducted

Sale price per unit

LESS: Cost per unit
Gross profit per unit

Units sold
ADD:
Total units sold
MULTIPLY BY: Gross profit per unit
Total gross profit on co
LESS: Actual commission
Net income of consigno

ANSWER: D.

[8.] Total collections on con

LESS: Amount to be deducted
Net remittance to cons

ANSWER: B.

PROBLEMS 9-10
Abenson Appliance Center
[9.]
Inventoriable cost
ADD: Cartage-in
Total inventoriable cost
DIVIDE BY: No. of units consigned
Total inventoriable cost

Net sales
DIVIDE BY: Units sold
Sale price per unit
LESS: Cost per unit
 Gross profit per unit

Gross profit per unit

MULTIPLY BY: Units sold
Gross profit on consign
LESS: Commission on sales
Net income of consigno

ANSWER: B.

[10.]
Total units consigned
LESS: Units sold
Consigned units unsold
MULTIPLY BY: Total inventoriable cost
Total cost of unsold uni
TOTAL

ANSWER: C.

PROBLEMS 11-13
General Company
[11.] Sales price when paid in
MULTIPLY BY: Units sold
Cash from sales

Sales price on account

MULTIPLY BY: Rate
Down payment
ADD: Cash from sales
Total cash collected
LESS: Charges paid by consign
Commission
Net remittance to cons

ANSWER: B.

[12.] Units sold for cash

ADD: Units sold on credit
Total units sold

Freight charge on consi

ADD: Charges paid by consign
Total charges to be allo
DIVIDE BY: No. of units consigned
 Cost allocated per unit

Product cost per unit

ADD: Cost allocated per unit
Total inventoriable cost
MULTIPLY BY: Total units sold
Cost of goods sold

Cash sales
ADD: Credit sales
Revenue on consignme
LESS: Cost of goods sold
Actual commission
Net income on consign

ANSWER: D.

[13.] Total units consigned

LESS: Units sold

Consigned units unsold

MULTIPLY BY: Total inventoriable cost
Total cost of unsold un

ANSWER: C.

PROBLEMS 14-16
James Bond Company
[14.] Selling price [total amo
MULTIPLY BY: Rate sold
Sales revenue [on credi
MULTIPLY BY: Rate collected
Gross collection of cons
MULTIPLY BY: Complement of cash di
Net collection of consig
LESS: Commission to be dedu
Advance to consignor
Operating expenses sho
Net remittance to cons

ANSWER: A.

[15.] Total product cost

ADD: Freight charge paid by c
Total inventoriable cost
 MULTIPLY BY: Rate sold
Cost of goods sold

Gross collection of cons

MULTIPLY BY: Cash discount rate
Sales discount

Sales revenue [on credi

LESS: Sales discount
Net sales revenue
LESS: Cost of goods sold
Gross profit
LESS: Commission expense
Operating expenses
Net income on consign

ANSWER: D.

[16.] Total
LESS: Rate sold
Rate unsold
MULTIPLY BY: Total inventoriable cost
Cost of ending consigne

ANSWER: B.

PROBLEMS 17-19
Heth Computers
[17.] Selling price per unit - c
MULTIPLY BY: Units sold
Total cash sales

Selling price per unit - c

MULTIPLY BY: Units sold
Total credit sales
ADD: Total cash sales
LESS: Sales allowance
Net sales
MULTIPLY BY: Commission rate
Commission due

Total cash sales

ADD: Total credit sales
LESS: Commission due
Sales allowance
Allowance for doubtful
 Due from consignee

ANSWER: D.

[18.] Freight charge on consi

DIVIDE BY: No. of units consigned
Freight allocated per un

Product cost per unit

ADD: Freight allocated per un
Total inventoriable cost

Units sold
ADD:
Total units sold
MULTIPLY BY: Total inventoriable cost
Cost of goods sold

Net sales
LESS: Cost of goods sold
Commission expense
Doubtful accounts expense-
Net income of consigno

ANSWER: D.

Units consigned
LESS: Total units sold
Units on hand - consign
MULTIPLY BY: Total inventoriable cost
Ending inventory - cons

ANSWER: B.

PROBLEMS 20
Mongol Pencil Company
U * 100 - 10 = 35,505

U = no. of units sold by

Selling price per unit

LESS: Commission per unit
Net remittance per unit

Net remittance
 DIVIDE BY: Net remittance per unit
Units sold by consignee

ANSWER: B.

PROBLEM 21
Condoro Mfg. Company
Cartage cost
ADD: Freight charge on consi
Total charge
DIVIDE BY: No. of units consigned
Total allocation per uni

Product cost per unit

ADD: Total allocation per uni
Total inventoriable cost

(12 * S) - 15%(12 * S) - 1
82.75%(12 * S) - 1,600 -

Advertising expense rate bas

MULTIPLY BY: Commission rate based
Advertising rate based o
ADD: Commission rate based
Advertising and commis

Total
LESS: Advertising and commis
Complement

Net remittance
ADD: Cartage cost
Delivery and installation
Remittance gross of costs
DIVIDE BY: Complement
DIVIDE BY: Units sold
Selling price per unit
MULTIPLY BY: Units sold
Gross sales revenue
MULTIPLY BY: Complement
Remittance gross of costs
LESS: Cost of goods sold
 Delivery and installation
Net income

ANSWER: C.

PROBLEM 22
Conanan Bookstore
Selling price per unit
LESS: Commission per unit
Selling price less comm

Net remittance
ADD: Delivery expense
Advertising expense
Remittance gross of costs
DIVIDE BY: Selling price less comm
Units sold by consignee

ANSWER: B.

PROBLEMS 23-25
Rosales Corporation
[23.] Commission reported
DIVIDE BY: Commission rate on sal
Total sales
DIVIDE BY: Selling price per unit
No. of units sold

ANSWER: A.

[24.] Product cost per unit co

MULTIPLY BY: Units consigned
Cost of units consigned
MULTIPLY BY: Given rate
Sight draft on consignee
MULTIPLY BY: Units sold
DIVIDE BY: Units consigned
Recovery of sight draft

Total sales
LESS: Commission reported
Advertising expense
Delivery expense
Recovery of sight draft
 Net remittance to cons

ANSWER: C.

[25.] Selling price per unit

LESS: Product cost per unit co
Gross profit per unit
MULTIPLY BY: Units sold
Total gross profit
LESS: Commission reported
Advertising expense
Delivery expense
Net income of consigno

ANSWER: A.
No. of units sold 20
Sale price per unit 1,600
Sales revenue of consignor 32,000

On December 30, the sales report was received.

Revenue is recognized on December 30.

On November 30, the consignment was agreed upon.

No revenue is recognized on November 30.

Freight charge on consignment of goods 3,000

No. of units consigned 10
Freight allocated per unit 300

Sale price per unit 6,000

Cost per unit -3,000
Freight per unit, as additional cost -300
Gross profit per unit 2,700
No. of units sold 6
Gross profit on consignment sales 16,200
Sale price per unit 6,000
No. of units sold 6
Revenue on consignment sales 36,000
Commission rate based on sales 20%
Commission expense 7,200

Gross profit on consignment sales 16,200

Commission rate based on sales -7,200
Operating expenses -2,500
Net income on consignment sales 6,500

Product cost per unit 3,000

Freight allocated per unit 300
Total inventoriable cost per unit 3,300

Total units consigned 10

-6
Consigned units unsold 4
Total inventoriable cost per unit 3,300
Total cost of unsold units 13,200

Freight-out 7,500
5,000 The consignor agreed to absorb the consignee's expenditure for freight.
Freight charge on consignment of goods 12,500
No. of units consigned 25
Freight allocated per unit 500

Product cost per unit 10,000

Freight allocated per unit 500
Total inventoriable cost per unit 10,500

Total units consigned 25

-8
Units returned to consignor -2
Consigned units unsold 15
Total inventoriable cost per unit 10,500
Total cost of unsold units 157,500
 8
Units returned to consignor 2
Units to absorb freight costs 10

Freight allocated per unit 500

Units to absorb freight costs 10
Freight cost of sales 5,000

Sale price per unit 20,000

8
Revenue on consignment sales 160,000
Commission rate based on sales 25%
Commission expense 40,000

Product cost per unit 10,000

Delivery and installation per unit 1,000
Total product cost per unit excluding freight 11,000
8
Total cost of sales excluding freight 88,000

Revenue on consignment sales 160,000

Total cost of sales excluding freight -88,000
Freight cost of sales -5,000
Commission expense -40,000
Net income of consignor 27,000

Freight charge on consignment of goods 5,000

No. of units consigned 5
Freight allocated per unit 1,000

Product cost per unit 15,500

Freight allocated per unit 1,000
Total inventoriable cost per unit 16,500

Total units consigned 5

November -3
December -1
Consigned units unsold 1
Total inventoriable cost per unit 16,500
Total cost of unsold units 16,500
 November sales December sales
Down payment 5,000 5,000
Collection during month thereafter 1,000
Collections per consignment sale 6,000 5,000
Units sold in each month 3 1
Total collections per consignment sale 18,000 5,000
23,000
Commission rate 20%
Amount to be deducted from remittance 4,600

Sale price per unit 25,000 Sale price per unit

Cost per unit -16,500 MULTIPLY BY: Units sold
Gross profit per unit 8,500 Revenue on consignment sales
MULTIPLY BY: Commission rate based on sales
November 3 Actual commission accrued
December 1
Total units sold 4
Gross profit per unit 8,500
Total gross profit on consignment sales 34,000
Actual commission -20,000
Net income of consignor 14,000

Total collections on consignment sales 23,000

Amount to be deducted from remittance -4,600
Net remittance to consignor 18,400

TV DVD
Inventoriable cost 310,000 280,000
Cartage-in 3,500 1,500
Total inventoriable cost 313,500 281,500
No. of units consigned 10 5
Total inventoriable cost per unit 31,350 56,300

280,000 210,000 Sale price per unit

7 3 MULTIPLY BY: Units sold
Sale price per unit 40,000 70,000 Revenue on consignment sales
Cost per unit -31,350 -56,300 MULTIPLY BY: Commission rate based on sales
Gross profit per unit 8,650 13,700 Actual commission accrued

Gross profit per unit 8,650

7
Gross profit on consignment sales 60,550
Commission on sales -28,000
Net income of consignor 32,550

TV DVD
Total units consigned 10 5
-7 -3
Consigned units unsold 3 2
Total inventoriable cost per unit 31,350 56,300
Total cost of unsold units 94,050 112,600
206,650

Sales price when paid in cash 15,000

2
Cash from sales 30,000

Sales price on account 18,000

25%
Down payment 4,500
Cash from sales 30,000
Total cash collected 34,500
Charges paid by consignee -3,200
Commission -7,200
Net remittance to consignor 24,100

Units sold for cash 2

Units sold on credit 1
Total units sold 3

Freight charge on consignment of goods 2,000

Charges paid by consignee 3,200
Total charges to be allocated 5,200
No. of units consigned 5
Cost allocated per unit 1,040

Product cost per unit 8,000

Cost allocated per unit 1,040
Total inventoriable cost per unit 9,040
Total units sold 3
Cost of goods sold 27,120

30,000 Revenue on consignment sales

Credit sales 18,000 MULTIPLY BY: Commission rate based on sales
Revenue on consignment sales 48,000 Actual commission accrued
Cost of goods sold -27,120
Actual commission -7,200
Net income on consignment sales 13,680

Total units consigned 5

Cash -2
Credit -1
Consigned units unsold 2
Total inventoriable cost per unit 9,040
Total cost of unsold units 18,080

Selling price [total amount] of consigned goods 150,000

70%
Sales revenue [on credit] 105,000 Gross collection of consignee
Rate collected 80% MULTIPLY BY: Commission rate
Gross collection of consignee 84,000 Commission to be deducted
Complement of cash discount rate [2/10, n/30] 98%
Net collection of consignee 82,320
Commission to be deducted -12,600
Advance to consignor -60,000
Operating expenses shouldered by conisgnee -8,000
Net remittance to consignor 1,720

Total product cost 100,000

Freight charge paid by consignor 1,200
Total inventoriable cost 101,200
 70%
Cost of goods sold 70,840

Gross collection of consignee 84,000

Cash discount rate [2/10, n/30] 2%
Sales discount 1,680

Sales revenue [on credit] 105,000

Sales discount -1,680
Net sales revenue 103,320 Selling price [total amount] of consigned g
Cost of goods sold -70,840 MULTIPLY BY: Commission rate
Gross profit 32,480 Actual commission expense
Commission expense -15,750
Operating expenses -8,000
Net income on consignment sales 8,730

100%
-70%
Rate unsold 30%
Total inventoriable cost 101,200
Cost of ending consigned inventory 30,360

Selling price per unit - cash sales 130,000

10
Total cash sales 1,300,000

Selling price per unit - credit sales 140,000

12
Total credit sales 1,680,000
Total cash sales 1,300,000
Sales allowance -20,000
2,960,000
Commission rate 15%
Commission due 444,000

Total cash sales 1,300,000

Total credit sales 1,680,000
Commission due -444,000
Sales allowance -20,000
Allowance for doubtful accounts -70,000
Due from consignee 2,446,000

Freight charge on consignment of goods 18,000

No. of units consigned 30
Freight allocated per unit 600

Product cost per unit 80,000

Freight allocated per unit 600
Total inventoriable cost per unit 80,600

cash 10
credit 12
Total units sold 22
Total inventoriable cost per unit 80,600
Cost of goods sold 1,773,200

2,960,000
Cost of goods sold -1,773,200
Commission expense -444,000
Doubtful accounts expense- borne by consignor -70,000
Net income of consignor 672,800

Units consigned 30
Total units sold -22
Units on hand - consignee 8
Total inventoriable cost per unit 80,600
Ending inventory - consignee 644,800

U * 100 - 10 = 35,505

U = no. of units sold by consignee

Selling price per unit 100

Commission per unit -10
Net remittance per unit 90

Net remittance 35,505

Net remittance per unit 90
Units sold by consignee 395

Cartage cost 600

Freight charge on consignment of goods 4,000
Total charge 4,600
No. of units consigned 20
Total allocation per unit 230

Product cost per unit 10,000

Total allocation per unit 230
Total inventoriable cost per unit 10,230

(12 * S) - 15%(12 * S) - 15%(15%(12 * S)) - 1,600 - 600 = 196,400 S = Selling price per unit
82.75%(12 * S) - 1,600 - 600 = 196,400

Advertising expense rate based on commission 15%

Commission rate based on sales 15%
Advertising rate based on sales 2.25%
Commission rate based on sales 15%
Advertising and commission rate on sales 17.25%

100%
Advertising and commission rate on sales -17.25%
Complement 82.75%

Net remittance 196,400

Cartage cost [paid by consignee] 600
Delivery and installation cost 1,600
Remittance gross of costs paid by consignee 198,600
Complement 82.75%
12
Selling price per unit 20,000 Total inventoriable cost per unit
12 MULTIPLY BY: Units sold
Gross sales revenue 240,000 Cost of goods sold
Complement 82.75%
Remittance gross of costs paid by consignee 198,600
Cost of goods sold -122,760
Delivery and installation cost -1,600
Net income 74,240

Selling price per unit 100

Commission per unit -20
Selling price less commission per unit 80

Net remittance 142,020

Delivery expense 180
Advertising expense 200
Remittance gross of costs paid by consignee 142,400
Selling price less commission per unit 80
Units sold by consignee 1,780

Commission reported 3,375

Commission rate on sales price 15%
Total sales 22,500
Selling price per unit 1,500
No. of units sold 15

Product cost per unit consigned 900

Units consigned 150
Cost of units consigned 135,000
Given rate 60%
Sight draft on consignee [advance] 81,000
15
Units consigned 150
Recovery of sight draft 8,100

Total sales 22,500

Commission reported -3,375
Advertising expense -2,250
Delivery expense -1,125
Recovery of sight draft -8,100
Net remittance to consignor 7,650

Selling price per unit 1,500

Product cost per unit consigned -900
Gross profit per unit 600
15
Total gross profit 9,000
Commission reported -3,375
Advertising expense -2,250
Delivery expense -1,125
Net income of consignor 2,250
nditure for freight.
 25,000
4
100,000
20%
20,000

TV DVD
40,000 70,000
7 3
280,000 210,000
sed on sales 10% 10%
28,000 21,000
 48,000
15%
7,200

ection of consignee 84,000

15%
on to be deducted 12,600
105,000
15%
15,750
 10,230
12
122,760
MILLAN
MILLAN
MILLAN