Lark Inc. entered into a consignment arrangement with Sorel Corporation. Sorel will sell statues on behalf of Lark for $1,500 each and retain a commission of 15%. Both companies report using IFRS. The following occurred during the month of May: • . May 1-Lark sent 12 statues to Sorel May 10 - Sorel sold 4 statues May 15 - Sorel sent cash payment to Lark for the statues sold. Required: a) Which company is the principal and which is the agent in this consignment arrangement? b) Record journal entries for the above transactions for Lark Inc. Assume the cost of each statue for Lark was $1,000 and that they were initially sitting in "finished goods inventory". c) Record the journal entries for the above transactions for Sorel Corporation.
Lark Inc. entered into a consignment arrangement with Sorel Corporation. Sorel will sell statues on behalf of Lark for $1,500 each and retain a commission of 15%. Both companies report using IFRS. The following occurred during the month of May: • . May 1-Lark sent 12 statues to Sorel May 10 - Sorel sold 4 statues May 15 - Sorel sent cash payment to Lark for the statues sold. Required: a) Which company is the principal and which is the agent in this consignment arrangement? b) Record journal entries for the above transactions for Lark Inc. Assume the cost of each statue for Lark was $1,000 and that they were initially sitting in "finished goods inventory". c) Record the journal entries for the above transactions for Sorel Corporation.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Lark Inc. entered into a consignment arrangement with Sorel Corporation. Sorel will sell statues
on behalf of Lark for $1,500 each and retain a commission of 15%. Both companies report using
IFRS. The following occurred during the month of May:
•
May 1 - Lark sent 12 statues to Sorel
• May 10 - Sorel sold 4 statues
•
May 15 - Sorel sent cash payment to Lark for the statues sold.
Required:
a) which company is the principal and which is the agent in this consignment arrangement?
b) Record journal entries for the above transactions for Lark Inc. Assume the cost of each
statue for Lark was $1,000 and that they were initially sitting in "finished goods inventory".
c) Record the journal entries for the above transactions for Sorel Corporation.
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