CONSIGNMENT ACCOUNT

PROBLEM - 2

Active of Dhaka sent a consignment of goods to Strong of Rajshahi on the basis that Strong was to effect sales on behalf of Active and receive a commission of 20% on the selling price.

Strong was responsible for all expenses at his end. The commission was considered to include del credere commission also.

Active sent the goods costing Tk. 25000. He spent Tk.300 on the packing and forwarding. On receiving the goods, Strong accepted Active’s draft for Tk.20000 and paid the following expenses:

Railway Freight (Dhaka to Rajshahi) Tk. 450
Godown Rent Tk. 300
Insurance (Godown) Tk. 150
Miscellaneous Tk. 75

He sold 80% of the goods for Tk.38000. There was a bad debt of Tk. 1000.


Requirement:

Give journal entries in the books of the both the parties and prepare important ledger accounts.