Reference no: EM131769784

The Television Inc. agrees to transfer television sets to Brooks Co. on a consignment basis. The consignee is to sell sets at $398 and is to receive a 25% commission on the sales price. The consignor agrees to reimburse the consignee for all expenses related to the consignment. The agreement also calls for an advance payment of $100 per set by the consignee; the $100 advance is to be deducted as settlement is made for each set sold. The consignee is to provide an account sales quarterly and is to make cash remittance for the amount owed at that time.

Transactions for the period 1/1-31/12 are listed below:

a) The consignor shipped 10 sets to the consignee. The consignor maintains a cost accounting system and perpetual inventories; records show a cost for each set of $210

b) The consignor paid freight charges on the shipment, $165.

c) The consignee made advance payments on the sets received.

d) The consignee sold 6 sets for cash; expenses of delivery and installation chargeable to the consignor were $75.

e) The consignee returned 2 sets representing a model that could not be sold and paid freight charges of $40 on the return.

f) The consignee prepared an account sales and made cash settlement on December 31.

Instructions :

1) Prepare the account sales to be submitted by the consignee

2) Prepare the entries that would be made by the consignee, assuming that (a) consignment profits are calculated separetely, and (b) consignment profits are not calculated separetely

3) Prepare the entries that would be made by the consignor, assuming that (a) consignment profits are calculated separetely, and (b) consignment profits are not calculated separetely