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Consignment

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Abhishek Kumar

student

371 Points Joined January 2013

X of kolkata sends out goods costing rs.300000 to Y of delhi. commission agreement-2% on sales+3% on sales as del -credere commission. the entire goods is sold by consignee for rs. 4 lacs. however, consignee is able to recover rs.395000 from the debtors. the amount of profit to be transferred to p/l as net commission by consignee will be______? please rply

Replies (2)

Deepak Gupta

CA Student

15927 Points Joined May 2011

Originally posted by : Abhishek Kumar
	X of kolkata sends out goods costing rs.300000 to Y of delhi. commission agreement-2% on sales+3% on sales as del -credere commission. the entire goods is sold by consignee for rs. 4 lacs. however, consignee is able to recover rs.395000 from the debtors. the amount of profit to be transferred to p/l as net commission by consignee will be______? please rply

When the consignee is in receipt of del-credere commission, loss on account of bad debts is born by the consignee.
.
The amount to be transferred to P/L A/c by consignee in that case will be:

= Gross Commission Received – Loss on account of Bad Debts
.
So, in given Case:

Gross Commission Received (Rs. 400000 x 5%)	20000
Less: Loss on Account of Bad Debts (Rs. 400000 – Rs. 395000)	5000
Net amount to be transferred to General P/L	15000