DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : CH. ANURADHA
Designation : Lecturer
Branch : Commercial & Computer Practice
Institute : Govt. Polytechnic for women,
Bheemunipatnam
Year/Semester : IV semester
Subject : Accountancy-III
Sub-code : CCP-402
Topic : CONSIGNMENT ACCOUNTS

Sub Topic : Exercise on

“CONSIGNMENT ACCOUNTS”
Duration : 50 Minutes
Teaching aids : PPT, ANIMATION
CCP402.6-7 1
Recap

In the last class, we discussed about

 Accounting treatment in the books of consignee
 Opening consignor’s a/c
 Posting the journal entries in the consignor
account
 Closing the account

CCP402.6-7 2
Objectives:
On completion of this period, you would be
able to:
 Know the preparation of Consignment accounts
a) In the books of Consignor:
 Pass Journal Entries
 Prepare consignment a/c, consignee’s a/c &
Goods sent on consignment a/c
b) In the books of Consignee:
 Pass Journal Entries
 Prepare Consignor’s a/c
CCP402.6-7 3
Now, for the given exercise, we will prepare
 Journal
 Ledger accounts

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Exercise: 1

 X & Co., of Vizag consigned goods Rs.50,000

 to their agent Mr. Y of Bheemunipatnam
 X & Co., paid expenses Rs.1,500 &
 drew two months bill for Rs.20,000 on Y,
 Which was discounted for Rs.19,800

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 X & Co., received Account sales from Y

 Gross sales Rs.80,000

 Expenses Rs. 4,000
 Commission 10% on sales

 Y remitted the balance due to X & Co.,

CCP402.6-7 6
 Pass journal entries &
 Show necessary Ledger Accounts
 In the books of both the parties

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Solution:

Journal Entries in the books of

X & Co., Vizag (Consignor)

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1. Goods sent on consignment Rs.50,000
Consignment a/c Dr. 50,000
To goods sent on
Consignment a/c 50,000
(Being the goods sent on consignment)

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2. Expenses Rs.1,500 incurred by X & Co.,
Consignment a/c Dr. 1,500
To Bank a/c 1,500
(Being the expenses incurred by X&Co. )

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3. Drew a bill of exchange on Y Rs.20,00
Bills Receivable a/c Dr. 20,000
To Y’s a/c 20,000
(Being the two months bill received as advance )

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4. The bill is discounted with bank for
Rs.19,800
Bank a/c Dr. 19,800
Discount a/c Dr. 200
To Bills Receivable a/c 20,000
(Being the bill discounted with bank )

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5. Expenses Rs.4,000 incurred by Y
Consignment a/c Dr. 4,000
To Y ’s a/c 4,000
(Being the expenses incurred by Y)

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6. Gross sales Rs.80,000 made by Y
Y ‘s a/c Dr. 80,000
To Consignment a/c 80,000
(Being the gross sales as per a/c sales)

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7. Commission 10% on sales (Rs.80,000)
payable to Y
Consignment a/c Dr. 8,000
To Y ’s a/c 8,000
(Being the commission payable)

CCP402.6-7 15
8. Transferring Profit to Profit and Loss a/c
Consignment a/c Dr. 16,500
To Profit and Loss a/c 16,500
(Being the profit transferred )

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9. Settlement of account with
Bank a/c Dr. 48,000
To Y ’s a/c 48,000
(Being the amount due, received)

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10. Closing Goods sent on consignment a/c by
transferring the goods sent on consignment a/c
to trading or purchases a/c
Goods sent on Consignment a/c Dr. 50,000
To Trading/Purchases a/c 50,000
(Being the a/c closed)

CCP402.6-7 18
The following accounts in the books of
X & Co, Vizag are to be opened

 Consignment Account
 Y ‘s Account
 Goods sent on Consignment Account

CCP402.6-7 19
1. Goods sent on consignment
Consignment a/c Dr. 50,000
To goods sent on
Consignment a/c 50,000
(Being the goods sent on consignment)

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Posting:

Dr. Consignment account Cr.

Date Particulars L Amt Date Particulars L.F. Amt
.F. Rs. Rs.
To goods sent on 50,000
consignment a/c

CCP402.6-7 21
 Posting:

Dr. Goods sent on Consignment a/c

Cr.
Date Particulars L. Amt Date Particulars L.F. Amt
F. Rs. Rs.
By Consignment a/c 50,000

CCP402.6-7 22
2. Expenses Rs.1,500 incurred by X & Co.,
Consignment a/c Dr. 1,500
To Bank a/c 1,500
(Being the expenses incurred )

CCP402.6-7 23
 Posting:

Dr. Consignment account Cr.

Date Particulars L.F. Amt Date Particulars L.F. Amt
Rs. Rs.
To Bank a/c 1,500
(X&Co.expenses)

CCP402.6-7 24
3. Drew a bill of exchange on Y Rs.20,000
Bills Receivable a/c Dr. 20,000
To Y & Co., 20,000
(Being the advance received )

CCP402.6-7 25
 Posting:

Dr. Y’s account Cr.

Date Particulars L.F. Amt Date Particulars L.F Amt
Rs. Rs.
By Bills Receivable a/c 20,000

CCP402.6-7 26
4. Gross sales Rs.80,000 made by Y
Y ‘s a/c Dr. 80,000
To Consignment a/c 80,000

(Being the gross sales as per a/c sales)

CCP402.6-7 27
 Posting:

Dr. Consignment account Cr.

Date Particulars L Amt Date Particular L Amt
.F. Rs. s .F. Rs.
3 By Y ‘s 80,000
a/c
(sales)

CCP402.6-7 28
 Posting:

Dr. Y account Cr.

Date Particulars L Amt Date Particulars L Amt
.F. Rs. .F. Rs.
To consignment a/c 80,000

CCP402.6-7 29
5. Expenses Rs.4,000 incurred by Y
Consignment a/c Dr. 4,000
To Y ’s a/c 4,000
(Being the expenses incurred)

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Posting:

Dr. Consignment account Cr.

Date Particulars L.F. Amt Date Particulars L.F. Amt
Rs. Rs.

To Y’s a/c 4,000

(expenses)

CCP402.6-7 31
 Posting:

Dr. Y’s account Cr.

Date Particulars L.F. Amt Date Particulars L.F. Amt
Rs. Rs.
3 By consignment a/c 4,000
(expenses)

CCP402.6-7 32
6. Commission 10% on sales payable to Y
Consignment a/c Dr. 8,000
To Y’s a/c 8,000
(Being the commission payable)

CCP402.6-7 33
Posting:

Dr. Consignment account Cr.

Date Particulars L.F. Amt Date Particulars L.F. Amt
Rs. Rs.
To Y’s a/c 8,000
(commission )

CCP402.6-7 34
Posting:

Dr. Y’s account Cr.

Date Particulars L.F. Amt Date Particulars L.F. Amt
Rs. Rs.
4 By consignment a/c 8,000
(commission)

CCP402.6-7 35
7. Transferring Profit to Profit and Loss a/c
Consignment a/c Dr.16,500
To Profit and Loss a/c 16,500
(Being the profit transferred )

CCP402.6-7 36
Posting:
Dr. Consignment account Cr.
Date Particulars L.F. Amt Date Particulars L.F. Amt
Rs. Rs.
1 To goods sent on 50,000 3 By Y’s a/c 80,000
consignment 15,000
2 To bank a/c 4,000
4 To Y a/c 8,000
5 To Y a/c 16,500
6 To Profit and loss a/c
(excess of credit
over debit)
80,000 80,000

CCP402.6-7 37
8. Settlement of account with Y
Bank a/c Dr. 48,000
To Y ’s a/c 48,000

(Being the amount due received)

CCP402.6-7 38
 Posting:

Dr. Y’s account Cr.

Date Particulars L.F. Amt Date Particulars L.F. Amt
Rs. Rs.
2 To consignment a/c 80,000 1 By bills 20,000
receivable
3 By consignment 4,000
4 By consignment 8,000
5 By bank a/c 48,000
(balance)

80,000 80,000

CCP402.6-7 39
9. Closing Goods sent on consignment a/c by
transferring the goods sent on consignment a/c
to Trading or Purchases a/c

Goods sent on Consignment a/c Dr. 50,000

To Trading/Purchases a/c 50,000
(Being the a/c closed)

CCP402.6-7 40
 Posting:

Dr. Goods sent on Consignment a/c Cr.

Date Particulars L Amt Date Particulars L Amt
F Rs. F Rs.
2 To Trading / 50,000 1 By con.a/c 50,000
Purchases a/c

50,000 50,000

CCP402.6-7 41
Journal Entries in the books of Y
(Consignee)

CCP402.6-7 42
1. Goods worth Rs.50,000 received from X & Co.,
No entry is made in the books of Y

CCP402.6-7 43
2. Expenses incurred by X & Co., Rs.1,500

No entry is made in the books of Y

CCP402.6-7 44
3. Rs.20,000 Advance paid, by accepting bill.

X & Co.’s a/c Dr. 20,000

To Bills payable a/c 20,000
(Being the advance paid )

CCP402.6-7 45
4. Expenses incurred by Y Rs.4,000.

X & Co.,’s a/c Dr. 4,000

To Bank a/c 4,000
(Being the expenses incurred by Y)

CCP402.6-7 46
5. Sale proceeds Rs.80,000.

Bank a/c Dr. 80,000

To X & Co.’s a/c 80,000
(Being the goods sold by Y)

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6. Commission (10%) on sales (Rs.80,000) due

X & Co.,’s a/c Dr. 8,000

To Commission a/c 8,000
(Being the commission receivable)

CCP402.6-7 48
7. For final remittance to X & Co.

X & Co.’s a/c Dr. 48,000

To Bank a/c
48,000
(Being the final remittance)

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Opening of the following account in the
books of Y

 X & Co., a/c

CCP402.6-7 50
1. Goods worth Rs.50,000 received from
the X & Co.

No entry is made in the books of Y

CCP402.6-7 51
2. Expenses incurred by X & Co., Rs.1,500

No entry is made in the books of Y

CCP402.6-7 52
3. Rs.20,000 Advance paid, by accepting
bill.

X & Co’s a/c Dr. 20,000

To Bills payable a/c 20,000
(Being the advance paid )

CCP402.6-7 53
 Posting:

Dr. X & Co.,’s account Cr.

Date Particulars L.F. Amt Date Particulars L.F. Amt
Rs. Rs.
To 20,000
Bills payable a/c
(advance paid)

CCP402.6-7 54
4. Expenses incurred by Y Rs.4,000

X & Co., ’s a/c Dr. 4,000

To Bank a/c 4,000
(Being the expenses incurred by consignee)

CCP402.6-7 55
Posting:

Dr. X & Co., account Cr.

Date Particulars L. Amt Date Particulars L. Amt
F. Rs. F. Rs.
1 To bills payable 20,000
2 To Cash/Bank 4,000
a/c (Y’s expenses)

CCP402.6-7 56
5. Sale proceeds Rs.80,000

Bank a/c Dr. 80,000

To X & Co.,’s a/c 80,000
(Being the goods sold by Y)

CCP402.6-7 57
Posting:

Dr. X & Co.’s account Cr.

Date Particulars L. Amt Date Particulars L. Amt
F. Rs. F. Rs.
1 To bills 20,000 3 By bank a/c 80,000
payable a/c (sales)
2 To 4,000
Cash/bank
a/c

CCP402.6-7 58
6. Commission (10%) on sales (Rs.80,000)
due

X & Co.,’s a/c Dr. 8,000

To Commission a/c 8,000
(Being the commission receivable)

CCP402.6-7 59
Posting:

Dr. X & Co., account Cr.

Date Particulars L. Amt Date Particulars L. Amt
F. Rs. F. Rs.
1 To bills payable 3 By Bank 80,000
a/c 20,000 a/c (sales)
2 To Cash a/c 4,000
4 To commission 8,000
a/c

CCP402.6-7 60
7. For final remittance to X & Co.,

X & Co.,’s a/c Dr.

To Bank
(Being the final remittance to X & Co.,)

CCP402.6-7 61
Posting:

Dr. X & Co account Cr.

Date Particulars L. Amt Date Particulars L. Amt
F. Rs. F. Rs.
1 To bills payable 20,000 3 By Bank 80,000
a/c a/c (sales)
2 To Cash a/c 4,000
4 To commission 8,000
a/c
To bank a/c
5 48,000
(balance
remitted)
80,000 80,000
CCP402.6-7 62
Assignment:

1. Hemu of Nellore consigned goods to Chamu,

Bheemili
 60 boxes of medicines @ Rs.400/-
 The consignor paid
 Freight charges and insurance : 2,000
 Chamu sent Rs.10,000 as advance

CCP402.6-7 63
 Hemu, received an account sales, contains:
 Gross sale proceeds Rs.34,000
 Transportation and warehousing charges
Rs.1,500
 Commission at 15%

 Hemu received bank remittance for the due from

chamu

CCP402.6-7 64
 Pass journal entries &
 Show necessary Ledger Accounts
 In the books of both the parties

CCP402.6-7 65
Summary:

In this class, we discussed about

 The preparation of “Consignment accounts”
 a) In the books of Consignor:
 Pass Journal Entries
 Prepare consignment a/c, consignee’s a/c &
Goods sent on consignment a/c
b) In the books of Consignee:
 Pass Journal Entries
 Prepare Consignor’s a/c
CCP402.6-7 66