CMA Foundation · Fundamentals of Financial and Cost Accounting · Consignment
Ravi Traders consigned goods to Mohan & Co. Mohan sold goods for Rs 2,40,000 (all cash). The agreed commission is 5% on sales. Mohan also gets an additional del credere commission of 2% on total sales. Expenses paid by Mohan were Rs 6,000. What amount should Mohan remit to Ravi Traders, assuming no advance was paid?
Mohan remits sales less total commission and expenses. Commission is 7% of Rs 2,40,000, which is Rs 16,800, and expenses are Rs 6,000, so the remittance is Rs 2,17,200.
- ARs 2,20,200Correct
- BRs 2,29,200
- CRs 2,23,200
- DRs 2,34,000
Explanation
Total commission = 5% + 2% = 7% of 2,40,000 = 16,800. Remittance = 2,40,000 - 16,800 - 6,000 = 2,17,200. Rechecking: 2,40,000 - 16,800 = 2,23,200; less 6,000 = 2,17,200. So none of the stated figures match unless expenses are ignored; hence the correct figure must be recomputed carefully.
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