Reference no: EM132952774

TS Trading consigned 100 beds costing P600 each to PP Company. The advertised selling price is P1,000 each bed. The consignment agreement provides that the consignee is to be allowed a commission of 15% of the selling price. Furthermore, PP Company has to draw a sight draft for 60% of the cost of the beds; the advance is to be recovered periodically by monthly deductions (in proportion to units sold) from the remittances which accompany the account sales. All expenses of the consignee are to be deducted monthly as incurred.

At the end of the first month, the consignee rendered an account sales showing among others the following charges:

Commission, P2,250;

Advertising, P1,500; and

Delivery Expense, P750.

Problem 1: The number of units sold by PP Co. is:

a. 10

b. 20

c. 15

d. 25

Problem 2: The amount remitted to TS Co. for the month is

a. P1,500

b. P5,100

c. P4,500

d. P5,500

Problem 3: The consignment profit (loss) of TS Co. is:

a. (P1,500.00)

b. P3,412.50

c. P 2,137.50

d. None of the above