Consignment Account - Entries In The Books of Consignor (Preparation) - SS3 Accounting Lesson Note
Question:
The following transactions were derived from the books of FUMI CO. for the month of August 2022. You are required to prepare entries into the books of consignor in tabular form.
Transactions for FUMI CO.
|
Date |
Transaction
Amount (₦)
08/01/2022
Received consignment of goods
200,000
08/05/2022
Sold goods from consignment
50,000
08/07/2022
Sold goods from consignment
30,000
08/10/2022
Sold goods from consignment
20,000
08/12/2022
Sold goods from consignment
25,000
08/15/2022
Returned unsold goods to consignor
70,000
08/20/2022
Sold goods from consignment
40,000
08/25/2022
Sold goods from consignment
35,000
08/28/2022
Sold goods from consignment
15,000
08/31/2022
Sold goods from consignment
10,000
Answer:
Entries in the Books of Consignor
|
Date |
Transaction
Debit (₦)
Credit (₦)
08/01/2022
08/05/2022
08/07/2022
08/10/2022
08/12/2022
08/15/2022
08/20/2022
08/25/2022
08/28/2022
08/31/2022
Total
Consignment sent to FUMI CO.
Cash received from FUMI CO.
Cash received from FUMI CO.
Cash received from FUMI CO.
Cash received from FUMI CO.
Goods returned from FUMI CO.
Cash received from FUMI CO.
Cash received from FUMI CO.
Cash received from FUMI CO.
Cash received from FUMI CO.
-
50,000
30,000
20,000
25,000
70,000
40,000
35,000
15,000
10,000
285,000
200,000
-
-
-
-
-
-
-
-
-
200,000
Note:
-
In a consignment arrangement, the consignor (seller) sends goods to the consignee (buyer) to sell on their behalf.
The consignor records the goods sent to the consignee as inventory in their books until the goods are sold.
When the consignee sells the goods, they remit the proceeds (less commission) to the consignor.
If any unsold goods are returned by the consignee, they are returned to the consignor, who can then sell them to another buyer or retrieve them as inventory.