Exercise 6-22 On May 31, 2017, Ivanhoe Company consigned 70 freezers, costing $7

Question

Exercise 6-22 On May 31, 2017, Ivanhoe Company consigned 70 freezers, costing $700 each, to Bridgeport Company. The cost of shipping the freezers amounted to $630 and was paid by Ivanhoe Company. On December 30, 2017, a report was received from the consignee, indicating that 35 freezers had been sold for $1,010 each. Remittance was made by the consignee for the amount due after deducting a commission of 8%, advertising of $220, and total installation costs of $310 on the freezers sold. Calculate the inventory value of the units unsold in the hands of the consignee. Inventory value of units unsold Calculate the profit for the consignor for the units sold. Profit on consignment sales s Calculate the amount of cash that will be remitted by the consignee Remittance from consignee

Explanation / Answer

Part 1 - Calculation of units unsold in the hands of consignee

Part 2 - Calculation of Profit

Part 3 - Cash amount to be remitted by consignee

Particulars Amount Purchase cost of freezers (70*$700) $49000 Add : Freight expenses $630 Total Inventriable cost $49630 Unsold stock cost of 35 freezers ($49630/70*35) $24815

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