P2_104_Consignment Sales and Corporate Liquidation_key Answers

8/13/2019 P2_104_Consignment Sales and Corporate Liquidation_key Answers

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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

PRACTICAL ACCOUNTING 22013-2014

CONSIGNMENT SALES / CORPORATE LIQUIDATIONP2 - 104

CONSIGNMENT SALES

Prob!" 1# Paul, Inc., agrees to transfer television sets to Walker Bros. on a consignment basis. The consignee is tosell a set at 40% above cost exclusive of freight and is to receive a 0% commission on sales !rice. The consignoagrees to reimburse the consignee for all ex!enses related to the consignment. The agreement also calls for anadvance !a"ment b" the consignee of #0% !er set based on selling !rice$ the said advance is to be deducted assettlement is made for each set sold. The consignee is to !rovide an account sales uarterl" and is to make cashremittance for the amount o&ed at that time. The follo&ing consignment sales activities occurred during the 'ctober to (ecember # of current "ear)

*ets shi!!ed + 00$ nit cost each set + P 0,000$ -reight charges on the shi!ment !aid b" the consignor + P/,000$ The consignee made advance !a"ments on the sets received$ dvertising cost !aid b" the consignee + P/0,000

The consignee sold 10 sets for cash$ ex!enses of deliver" and installation &ere P 2/,000. fter notif"ing thconsignor &ith the total sets sold for the !eriod, the consignee returned 0 sets re!resenting a model that could nobe sold and !aid freight charges of P 1,000 on the return.

(etermine the follo&ing). The amount remitted b" the consignee.

a. P 3##,000 b. P 03,000 c. P 0,000 d. P /4,000

2. The value of the remaining 20 sets of inventor" unsold.a. P 200,000 b. P 22#,000 c. P 2/,/00 d. P 20,/00

#. et income b" the consignor as a result of the above transactions.a. P /,/00 b. P #,000 c. P 2/,000 d. P ##,000

Prob!" 2# 567 8om!an" consigned 0 refrigerators to 9:; *ales 8om!an". 6ach refrigerator cost P2,000. Thefreight on the shi!ment amounting to P/00 each &as !aid b" 567. Western *ales 8om!an" returned unit to 567 ingood condition uestions). The amount remitted b" 9:; *ales 8om!an" amounted to)

a. P 02,400 b. P 21,000 c. P 02,200 d. P 22,2/0

2. The net !rofit to be recogni?ed b" 567 8om!an" on the above consignment amounted to)

a. P ,00 b. P ,/00 c. P 2,200 d. P 2,#00

Prob!" 3# In consignment sales, the consignor ma" !refer the consignment of goods to dealers over direct sale fothe follo&ing reasons, exce!t

a. The consignment ma" be the onl" &a" in &hich a &ider marketing area can be secured b" a !roducer,manufacturer, or distributor.

b. *elling s!ecialists ma" be obtained b" the consignor, !articularl" for sale of grain, livestock, and !roduce.

PARTNERSHIP ACCOUNTING - P2 104 Page


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c. The consignor can recover unsold goods or the !roceeds from sales from the consignee even though thelatter becomes insolvent or bankru!t.

d. The risks of !h"sical deterioration as &ell as !rice fluctuation are avoided.

COORPORATE LIQUIDATION

Prob!" 1# The follo&ing data &ere taken from the statement of reali?ation and liuidation of nne 8om!an" for theuarter ended *e!tember #0, 20#)

7iabilities to be liuidated P,42/,000

*u!!lementar" charges 14/,/00

7iabilities not liuidated ,0/0,000

*u!!lementar" credits 3@2,/00

ssets acuired @10,000

7iabilities liuidated 30,000

ssets to be reali?ed /#,/00

ssets reali?ed 1/,000

7iabilities assumed 4/,000

The beginning balances of ordinar" shares and retained earnings are P/0,000 and P41,000, res!ectivel". The neincome for the !eriod is P4#,000. Ao& much is the ending cash balance

a. P,/4/,/00 b. P,412,/00 c. P,04/,/00 d.P,4@/,000

Prob!" 2# The follo&ing information are related to Cohn 7o"d 8or!oration &hich is undergoing liuidation)

a. Bonds !a"able amounting to P#,@00 is secured b" merchandise inventor" &ith book value of P2#,000 and nereali?able value of 2D# of recorded amount.

b. 'f the P3/,@00 accounts !a"able, P//,000 is secured b" eui!ment &ith carr"ing amount of P@,100 &hich is0% reali?able.

c. Building &ith carr"ing amount of P23,000 has a net reali?able value of P33,000.

d. 'ther unrecorded liabilities are accrued interest on bonds, P#,00$ salaries !a"able, P,400$ taxes !a"ableP,@00 and trusteeEs fee, P1,/00.

e. 8ash available !rior to liuidation amounts to P,300.f. Total assets of Cohn 7o"d 8or!oration !resented in the *tatement of -inancial Position !rior to liuidation

amounts to P410,000. :emaining assets other than those &hose reali?able value &ere mentioned above have:F of @0% of recorded amount, exce!t for !re!aid ex!enses and good&ill amounting to P,@00 and P22,000res!ectivel"

g. Total liabilities of the com!an" !rior to liuidation amounts to P#10,000.

8om!ute for the estimated deficienc" to unsecured liabilities.a. P01,20 b. P20,020 c. P30,#@0 d.

P@,/20

Prob!" 3# PriveE 8om!an" has been undergoing liuidation since Canuar" . s of Cune #0, its condensed*tatement of :eali?ation G 7iuidation is !resented belo&)

ssets reali?ed P0/,000 *ales on account P,/00Interest on investment /2/ ssets not reali?ed 4,000Purchases @,2/0 7iabilities not liuidated ,4/ssets acuired ,/00 *ales for cash 1,/007iabilities assumed /,2/0 ssets to be reali?ed ##2,/00Pa"ment of ex!enses of trustee 2@,2/0 7iabilities liuidated 22,/007iabilities to be liuidated 22,/00

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The net gain


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The !roHrata !a"ment to stockholders on the !eso is)a. P0.0 b. P0.4# c. P0.#0 d. P0./

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P2_104_Consignment Sales and Corporate Liquidation_key Answers

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