CONSIGNMENT SALES

1. Snoop Inc. enter into a consignment agreement with Will Corp. on February 2021. During February, Snoop
shipped 20 units of machine to Will corp. and paid P5,000.00 freight cost. Will Corp shall receive a 10%
commission of the units sold. For the month of February, the account sales submitted by Will Corp. includes the
following data:

Sales (12 units, 15% GP excluding freight) 120,000.00

Less Seling Expense 10,000.00
Commission 12,000.00
Installation and Delivery 5,000.00
Advances to Consignor 25,000.00 52,000.00
Net Remittance 68,000.00

Net Loss is:

 (12,000)
 (14,000)
 (10,000)
 (9,000)
Cost of Goods sold is:

 102,000
 103,000
 105,000
 108,000

2. On April 30, 2030, Gustav Corp. consigned 450 shoes to Angel Corp. for the sale at P80,000.00 each and paid
P60,000.00 Fright to transport the goods to Angel Corp. An account sales were received from Angel Corp. on
May 31, reporting the sale of one hundred shoes, together with remittance of P1,360,000.00 balance due. The
remittance was net of the agreed 15% commission.
Total Consignment Sales revenue in April 30, 2030

 0
 36,000,000.00
 35,700,000.00
 6,800,000.00
Total Consignment Sales revenue for May 31, 2030

 8,000,000.00
 6,800,000.00
 0
 6,787,667.00
3. Vonne Inc. had the following consignment transactions during the month of December 2030:

Inventory Shipped on Consignment to Cyrus. Corp 90,000.00

Freight paid by Vonne 4,500.00
Inventory received on consignment from Mike Inc. 60,000.00
Feight paid by Mike Inc. 2,500.00

No sales of Consigned Goods were made through December 31, 2030

Vonne’s December 31, AFS should include consigned Goods inventory at:
 94,500
 90,000
 60,000
 62,500
4. Sol Corp. Consigned 10 cellphones to Dante Inc. Each cellphone cost P30,000.00 and are to be sold at P50,000.00
each. Sol Corp. paid P25,000 for the shipment to consignee.
On November 13, 2030, Dante Corp. Submitted an account Sales stating that it had returned one unit and was
remitting P219,000 after deducting the following charges:

Selling Expense 10,000.00

Commission, 20% of Selling Price ?
Installation and Delivery 6,000.00
Cartage cost upon receipt of Goods 5,000.00

Units Sold:

 8
 6
 7
 5
Cost of Inventory

 101,500
 100,800
 102,000
 99,000
Total Consignment Net Profit

 24,800
 (25,500)
 23,000
 20,000

5. Irene Corp. consigned 10 bags to Aileen Inc. These bags had a cost of P10,800 each. Freight on shipments
amounting to P7,200 was paid by Irene Corp.

Aileen submitted an account sales stating that it has cold 6 bags and remitted cash amounting P81,900 to Irene
Corp. after deduction the following:

Selling Expense 5,400.00

Commission, 15% of Selling Price ?
Installation and Delivery 3,600.00
Cartage cost upon receipt of Goods 900.00

Total Consignment Sales

 91,800.00
 69,120.00
 108,000.00
 64,800.00
The commission earned

 16,200
 9,720
 15,000
 10,800.00
Consignor net profit

 17,100
 13,140
 36,000
 19,800
 Cost of Inventory

 43,200
 46,440
 46,080
 66,600

6. Anton Corp. consigned Goods 25 shirts to Paul Inc. The cost of the shirt is P310 each. Anton paid the freight of
P500. The shirt is to be sold at P500 each payable P100 in the amount of purchase and P20 per month thereafter.
Paul’s commission on consigned goods is 20%.
Paul Inc. was able to sell 15 shirts in July and 5 shirts is August. The regular monthly collections by Paul and the
appropriate cash remittances have been made to Anton at the end of each month. The parties agreed that Paul is
allowed only to deduct a commission based on the amount collected from consignment.
Cost of Inventory

 1,650
 1,750
 2,450
 1,550
Net Profit

 1,400
 2,940
 2,000
 1,500
Remittance by Paul

 460
 1,840
 2,000
 1,650

7. Edison Inc. consigned 10 dozen of bikes with the cost of P15,000 per bike to Paul cycling works. Edison Inc.
incurred freight costs of P450.00 per dozen. A month later, Consignee reported 7 dozen of bikes at P30,000 per
bike and expenses P45,000. Consignee remitted the proceeds to Edison Inc. net of agreed 15% commission on
sales.
Total Cash Remitted

 2,100,000
 2,137,500
 2,097,000
 2,142,000
Net Profit

 833,850
 2,142,000
 884,250
 882,000

8. Lego Corp. consigns toys debiting A/R for the retail sales price and Credit Sales. All cost relating to the consigned
toys are debit to expenses. The net remittances of the consigned are credit to accounts receivable.

In August 1200 toys costing 60 each and selling price of P100,00 each were consigned to SM Store. Freight Cost
of P800.00 was debited to freight Expense by the consignor. On August 31, SM Store remitted 42,606 to Lego
Corp. in full settlement of the balance due. A/R was credited for this amount. SM store deducted its commission
of P10 per toy sold and P54 for transportation expenses. The total toys sold by SM store is:

 480
  474
 426
 400
HOME OFFICE AND BRANCH
1. The HO shipped Merchandise to branch at 25% above cost. The branch then sells the merchandise at 25% above
billed price to customers. On November 30, all of the branch merchandise was destroyed by fire. The following
records were salvage by the branch.

Merchandise, January 1 (@ billed price) 82,500

Shipments from Home Office 55,000
Purchase from Outsiders @ 20% Mark – up Cost 3,750
Sales 84,500
Sales returns and allowances 1,875

Cost of Inventory destroyed by fire

 75,000
 65,000
 60,000
 70,000
Cost of sales of the branch coming from the HO @ billed Price

 137,500
 62,500
 60,000
 50,000

2. The following transaction were entered in the branch current accont of the IRVIN HO for the year 2023:

Branch Current - Irvin

Bg. Bal. (1/1/2023) 2,296,290.00 166,500.00 Collectio of A/R (9/12/2023)
Shipment to branch (4/1/2023 1,062,000.00
Cash forwarded, 6/1/2023 7,500.00
Opex charge to branch (12/31/2023) 14,400.00

 Shipments to the branch during the year were made at 20% above cost.
 The balance of the overvaluation of the branch inventory account was P106,500 at the bg. And the
allowance was written down to 73,500 at year end.
 On December 10, 2023, the HO purchased an equipment amounting to P180,000 for its branch. The said
equipment has a useful life of five years and will be carried in the bools of the branch but the HO
recorded the purchase by debiting the equipment.
 The branch recorded the depreciation of the equipment by debiting the HO Current account crediting
Accumulated Depreciation.
 Debit memo regarding the allocation of the operation expenses to the branch was received on 1/21/2024.
 Branch remitted cash to HO amounting to P165,000, which the HO received and recorded 1/2/2024.
 Branch reported Net income of P988,650.
 The interoffice accounts were in agreement at the beginning of the year

Net Income of the Branch that will be reported in the Combined Income Statement

 971,250
 1,195,650
 1,181,250
 1,044,750

3. A HO ships inventory to its branch at 125% cost. The required balance of the Deferred Profit account is P236,250.
During the year, the HO sent merchandise to the branch costing P2,352,000.00. at the end start of the year, the
branch balance sheet shows P945,000 of inventory on hand that was acquired from HO.
 By what amount is the COGS overstated?
 540,750
 777,000
 236,250
 189,000

4. During the year 2021, goods billed at P840,000 were shipped to the branch at 125% of cost. The account Loading
in Branch Inventory has a balance of P242,000 before adjustments. The beginning inventory of the branch from
the HO at a cost is P370,000; the beginning inventory of the branch from outsiders is P35,000; purchase from
outsiders is P220,000

Cost of Goods Available for sale of the branch

 1,297,000
 1,465,000
 1,539,000
 1,767,500

5. During 2021, goods were shipped to the branch at 120% above cost. The reciprocal account in the income
statement of the HO amounted to P237,500. The balance of the contra branch current account reports a balance of
P375,000 before adjustments. The beginning inventory of the branch from the HO at a cost if P360,000 and from
the outsiders, P93,000. The branch purchased goods from outsiders during the year amounting to P125,200.
If the ending inventory of the branch as reported in the combined statement of financial position is P345,000, 20%
of which are purchased from the outside suppliers, how much is the COGS to be reported in the branch’s income
statement for the year ended December 31, 2021?

 514,500
 551,075
 790,500
 470,700

6. The HO transfers merchandise to Manila branch at a mark up of 25% above cost during the year 2028 and 30%
above cost during the year 2027. In 2028, the reciprocal account in the Income statement of the branch is
P1,487,500. The account unrealized inventory profit has a balance of P84,000 at the end of the last year. The
branch started to acquire merchandise from outsiders during the year in the amount of P76,000.
Cost of goods available for sale of the branch at cost?

 1,851,500
 1,470,000
 1,927,500
 1,546,000

7. A HO bills its branch at 120% of cost. During 2028, inventory costing the HO P320,000 was transferred to the
branch. At year-end, the HO adjusted its Allowance for Overvaluation account by debiting P72,800. The branch’s
year end balance sheet shows P19,200 of inventory acquired from the HO
Beginning Inventory of Branch at cost

 60,000
 12,000
 72,000
 64,000

8. A HO bills its branch at mark up 125% above cost. The required balance of Allowance for overvaluation account
is P1,425,000. During the year, the HO sent merchandise to the branch costing P9,000,000. At the start of the
year, the branch Statement of Financial Position shows P1,800,000 of inventory on hand that was acquired from
the HO.
 Amount of allowance for unrealized gross margin in branch inventory account de debited at the year end

 12,250,000
 10,825,000
 1,185,000
 2,610,000

9. HO bills its branch for merchandise shipment at 30% above cost. The following are some of the account balances
on the books of HO and Branch as of December 31, 2030.

HO Branch
Jan. 1 Inventory 35,000.00 101,500.00
Shipments from HO 263,900.00
Purchases 1,575,000.00 350,000.00
Shipments to Branch 253,750.00
Branch inventory allowance 91,875.00
Sales 2,100,000.00 1,260,000.00
Opex 507,500.00 192,500.00
Per physical count, the ending inventory of the branch is P73,500 including goods from outside purchases of the
P48,475; the ending inventory of the HO is P210,000

Cost of Goods available for sale of the HO

 1,610,000
 1,863,750
 1,356,250
 1,575,000
Cost of Goods available for sale of the Branch

 715,400
 781,375
 689,500
 638,750
Total Ending Inventory to be shown on the combined F/S

 118,475
 277,725
 328,475
 280,000
Combined net income for the year

 957,950
 871,850
 891,975
 942,725

10. The balances are as of December 31, 2020, 4th year of the operation
HO Branch
Sales 300,000.00 170,000.00
Shipment to branch 48,000.00
Shipment from HO 60,000.00
Purchases 120,000.00 36,000.00
Opex 80,000.00 42,000.00
Jan. 1 Inventory 50,000.00 32,000.00
Unrealized Profit if Branch Inventory 17,200.00
 There are no shipments in transit between the HO and the branch. Both shipment accounts are properly recorded.
The closing inventory of the branch at billed price includes merchandise acquired from the HO in the amount of
P10,800; 6,000 acquired from vendors for a total of P16,800. While the closing inventory of the HO is P18,000.

Net income of Branch as far HO is concerned?

 32,400
 49,440
 39,400
 31,840

11. During the year 2023, goods billed at P3,250,000 were shipped to the branch at 130% of Cost. The account
Loading in branch inventory has a balance of P1,225,000 before adjustment. The beginning inventory of the
branch from the HO at a cost is P2,375,000; beginning inventory of branch from outsiders is P540,000; purchases
from outsiders is P1,450,000.
Total Cost of goods available for sale of the branch from the HO

 5,308,000
 6,337,000
 8,090,000
 6,100,000

12. Trial balance of Mike Corp and its branch

HO Branch
Jan. 1 Inventory 46,000.00 23,100.00
BranchCurrent 116,600.00
Purchases 380,000.00
Shipments from HO 209,000.00
Freight In 10,450.00
Expenses 104,000.00 58,100.00
HO account (106,600.00)
Sales (310,000.00) (280,000.00)
Shipments to Branch (200,000.00)
Branch Merchandise Mark up (22,000.00)

Freight cost, atypically 5% of the billing price is inventoriable. Merchandise on hand at a year end were: at HO
P64,000 at cost; at branch P33,000 at billing price.

Branch net income as far as HO is concerned:

 40,900
 32,100
 32,000
 33,000
Combined Net Income for 2020

 84,900
 76,100
 76,000
 77,000

13. The HO shipped merchandise costing P21,960 to Manila Br. And Paid for the freight charges of P3,960. Manila
Br was subsequently instructed to transfer the merchandise to Caloocan Br. Wherein Caloocan Br. Paid for P1,250
freight. If the Shipment was made directly from the HO to Caloocan, the freight cost would have been P5,050.
Amount of Branch Current to be Debited in the Books of the HO as a result of the inter branch transfer of
Merchandise

 160
 25,920
 51,680
 25,760