Reference no: EM132664681

Problem - Binaluyo Company consigned to Rante Inc 120 units of gas stoves on September 1, 2012. These economy stoves cost P500 per unit. Transportation of P1, 500 and insurance of P900 were paid on the shipment.

The consignment agreement requires the consignee to deposit in advance P36, 000. Upon receipt of each account sales, the consignor was to charge the advance deposit account proportionately for each unit sold, and the consignee was allowed to reduce its remittance check by this amount. Further, the consignee may also deduct in its account sales proportionate amount from its deposit for every unit returned to the consignor for any reason whatever, incidental expense on the returned units are to be charged to the consignor.

On September 3, 2012, Rante Inc received the consigned units and remitted the advance deposit. Upon inspection, it was ascertained that 6 units were defective and returned to the consignor. Four units were damaged in transit and were also returned. Rante Inc paid P100 on the returned units. It was agreed that the insurance company will pay only 90% of the manufacturing cost of units returned. Unrecorded cost of returned units is treated as other expense.

Inland transportation expenses of P350 and insurance of P200 were paid by the consignee. Sales price of the stoves was P1, 500 per unit and the commission of the consignee was 20%.

On September 30, 2011, Rante Inc rendered an account sales showing 80 units sold on which the consignee paid P150 for reconditioning and charged the consignor.

Required - Compute the cash remittance of Rante Inc enclosed with the account sales?

a) P67,850

b) P68,200

C) P70,850

d) P95,200