Ali of Kolkata senta consignment of cotton goods to Osman of Delhi, invoiced at 1,000 The invoice price was made by adding 25% to the.cost. The expenses incurred by Ali were: packing 24 carriage etc., 16 insurance 12 and other expenses 26. After three months he received Account Sales intimating that half of the consignment was sold at 600, The expenses incurred by the consignee were : Freight Rs 30, Fire insurance 18, and other expenses 10. His commission was 6% on sales and del credere commission 1-1

Ali of Kolkata senta consignment of cotton goods to Osman of Delhi, invoiced at 1,000 The invoice price was made by adding 25% to the.cost. The expenses incurred by Ali were: packing 24 carriage etc., 16 insurance 12 and other expenses 26. After three months he received Account Sales intimating that half of the consignment was sold at 600, The expenses incurred by the consignee were : Freight Rs 30, Fire insurance 18, and other expenses 10. His commission was 6% on sales and del credere commission 1-1 proportionate expenses p expenses are taken into consideration only for calculating the value of stock at the end am the amount of abnormal loss. The reason is simple to understand. Ifthe cost in inflated b, adding proportionate expenses, it would definitely lead to overstatement of consignmen profit. And if the consignee happens to share the profit, it means more commission to him Illustration 37 (Expenses Paid By Consignee On Return of Goods) Ali of Kolkata sent a consignment of cotton goods to Osman of Delhi, invoiced at 1,000 The invoice price was made by adding 25% to the cost. The expenses incurred by Ali Were : packing 24; carriage etc., 16; insurance 12 and other expenses 26. After three months he received Account Sales intimating that half of the consignment was sold at 600. The expenses incurred by the consignee were : Freight Rs, 30, Fire insurance 18, and other expenses 10. His commission was 6% on sales and del credere commission I -112%. But no sale could be made of the remainder so that it was brought back after another nine months at a further cost oft 60 paid by Osman. The goods were damaged and valued at 20% below cost. Give ledger accounts in the books of both the parties. Solution : Dr. Particulars Goods Sent on Consignment Account Cash (Expenses) : In the Books of Ali Consignment to Delhi Account Particulars Goods Sent on Consignment I Account (Load) Osman (Sale Proceeds) [B. Corn.] Cr. 200 600