Question

# On May 3, 2020, Sunland Company consigned 90 freezers, costing \$470 each, to Remmers Company. The...

On May 3, 2020, Sunland Company consigned 90 freezers, costing \$470 each, to Remmers Company. The cost of shipping the freezers amounted to \$870 and was paid by Sunland Company. On December 30, 2020, a report was received from the consignee, indicating that 45 freezers had been sold for \$750 each. Remittance was made by the consignee for the amount due after deducting a commission of 6%, advertising of \$180, and total installation costs of \$310 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

#### Homework Answers

Answer #1

Solution-

a) Computation of Inventory value-

 Freezer cost [45 * \$470] \$21150 Shipping cost [\$870/90 * 45] 435 Inventory Value \$21585

b) Computation of Profit on consignment sales-

 Sales [45*\$750] \$33750 Less :- Cost of freezer 21585 Less :- Commission [\$33750*6%] 2025 Less :- Advertising exp 180 Less :- Installation exp 310 Profit on consignment sales \$9650

c) Computation of remittance from consignee-

 Sale \$33750 Less :- Commission 2025 Less :- Advertising exp 180 Less :- Installation exp 310 Remittance from consignee \$31235

Ans :-

 a) Inventory Value \$21585 b) Profit on consignment sales \$9650 c) Remittance from consignee \$31235
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