Tingey Industries sells merchandise on a consignment basis to dealers. The selling price of the merchandise averages 25% above cost of merchandise. The dealer is paid a 10% commission on the sale price for all sales made. All dealer sales are made on a cash basis. The following consignment sale activities occurred during 2013:
Manufacturing cost of goods shipped on consignment---------$250,000
Sales price of merchandise sold by dealers-----------------------220,000
Payment made by dealers after deducting commission---------139,000
1. Prepare summary entries on the books of the cosigner for these consignment sale transactions
2. Prepare summary entries on the books of the dealer consignee, assuming there is only one dealer involved
3. Prepare the parts of Tingey Industries' financial statements at December 31, 2013, that relate to these consignment sales.
1 summary entries on the books of Tingey industries - cosignor
Details Debit Credit
Consignment Account $250,000
Goods sent on Consignment Account $250,000
(To record cost of goods sent on consignment)
Consignee's Account $220,000
Consignment Account $220,000
(To record sales of consignment goods by the consignee)
Consignment Account $22,000
Consignee's Account $22,000
(To record commission payable to consignee at 10% on sales of $220000)
Consignment stock $74,000
Consignment Account $74,000
(To record consignment stock at ...
Consignment accounting for Tingey Industries are examined.