Question

# On May 3, 2020, Marigold Company consigned 80 freezers, costing \$490 each, to Remmers Company. The...

On May 3, 2020, Marigold Company consigned 80 freezers, costing \$490 each, to Remmers Company. The cost of shipping the freezers amounted to \$870 and was paid by Marigold Company. On December 30, 2020, a report was received from the consignee, indicating that 40 freezers had been sold for \$670 each. Remittance was made by the consignee for the amount due after deducting a commission of 6%, advertising of \$210, and total installation costs of \$300 on the freezers sold.

(Round answers to 0 decimal places, e.g. 5,275.)

(a) Compute the inventory value of the units unsold in the hands of the consignee.

 Inventory value \$enter the inventory value in dollars

(b) Compute the profit for the consignor for the units sold.

 Profit on consignment sales \$enter the profit on consignment sales in dollars

(c) Compute the amount of cash that will be remitted by the consignee.

 Remittance from consignee \$enter the amount of cash that will be remitted by the consignee rounded to 0 decimal places

a) compuy the inventory value of the unit's unsold in the hands of consignee

Inventory cost =

80units shipped at a cost of \$490 (80×\$490)= \$39200

Add cost of shipping. = \$870

Total. (\$39200+\$870)= \$40070

Therefore inventory (\$40070×40/80) =\$20035

b) computation of consignment profit

 Particular amount Consignment sales (40×\$670) \$26800 (-) cost of units sold (\$40070×40/80) (\$20035) (-) commission charged by consignee (\$26800×6%) (\$1608) (-) advertising cost (\$210) (-) installation cost (\$300) Profit of consignment sales \$4647

3) cash remitted by the consignee

 Particular amount Consignment sales \$26800 (-) commission (\$1608) (-) advertising (\$210) (-) installation (\$300) Remittance from consignee \$24682

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