Problem 3 Bulldog Manufacturing Corp. consigned ten refrigerators to Poodles Sales Co. These refrigerators had a cost of P180 each. Freight on the shipment was paid by Bulldog in the amount of P120. Poodle Sales Co. submitted an account sales stating that it had sold six refrigerators and remitted the P1,365 balance due Bulldog after the following deductions from the selling price of the refrigerators: Commission 15% of selling price Marketing expenses P90 Delivery and installation of items sold P60 Cartage cost paid upon receipt of consignment P15 Q3 - The consignee sold the 6 refrigerators for a total of ____. Q4 - The commission earned on the sale of the 6 refrigerators by Central Sales Co. was ____. Q5 - The consignor's net profit from the sale of the consigned goods was ____.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Consignment Sales
Problem 3
Bulldog Manufacturing Corp. consigned ten refrigerators to Poodles Sales Co. These refrigerators had a cost of P180 each. Freight on the shipment was paid by Bulldog in the amount of P120.
Poodle Sales Co. submitted an account sales stating that it had sold six refrigerators and remitted the P1,365 balance due Bulldog after the following deductions from the selling price of the refrigerators:
Commission 15% of selling price
Marketing expenses P90
Delivery and installation of items sold P60
Cartage cost paid upon receipt of consignment P15
Q3 - The consignee sold the 6 refrigerators for a total of ____.
Q4 - The commission earned on the sale of the 6 refrigerators by Central Sales Co. was ____.
Q5 - The consignor's net profit from the sale of the consigned goods was ____.
Problem 4
Norwin Co. shipped inventory on consignment to Viyan Co. that cost P20,000. Viyan paid P500 for advertising that was reimbursable from Norwin. At the end of the year, 70% of the inventory was sold for P30,000. The agreement states that a commission of 20% will be provided to Viyan for all sales.
Q6 - What amount of net inventory on consignment remains on the balance sheet for the first year for Norwin?
Installment Sales
Problem 5
The Japan Homes Corporation started operations on January 1, 2017 selling home appliance and furniture sets both for cash and on instalment basis. Data on the instalment sales operations of the company gathered for the years ending December 31, 2017 and 2018 were as follows:
2017 2018
Installment Sales P1,200,000 P1,500,000
Cost of Installment Sales 720,000 1,050,000
Cash collected on instalment sales
2017 installment contracts 630,000 450,000
2018 installment sales 900,000
On January 6, 2018 an instalment sale in 2017 was defaulted and the merchandise was repossessed. The fair market value of the merchandise after reconditioning costs amounted to P15,000. There is a 10% normal profit based on estimated resale value, the corporation incurred P3,000 disposal costs and P5,000 reconditioning cost. Related instalment receivable balance on January 6, 2018 was P17,000. The operating expenses incurred in 2017 and 2018 amounted to P50,000 and P100,000, respectively.
Q7 - What is the gross profit rate 2017 and 2018, respectively?
Q8 - What is the Deferred Gross Profit as of 2018 form 2017 sales?
Q9 - How much is the amount of estimated resale value?
Q10 - What is the amount to be debited as the value of Repossessed Merchandise at a time of repossession?
Q11 - How much is the gain/(loss) on repossession?
Q12 - How much is the RGP after gain or (loss) on repossession in December 31, 2017?
Q13 - How much is the RGP after gain or (loss) on repossession in December 31, 2018?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
