Accounting for Special Transactions

Consignment account is debited with all expenses and credited with revenues. Thus it is a nominal account.
Consignee is a personal account.

There exists an agency relation between the consigner and consignee.
In a sale transaction, there are buyer and seller or debtor and creditor. The master servant relations exist in case of employment.

It includes not only the cost but also loading charges if any, and proportionate expenses of consignor as well as consignee. In abnormal loss, loading is not taken into account.

Loading = 25% of invoice price = 1/4^th of I.P.= 1/3^rd of cost = 1/3*1,20,000 = Rs.40,000
Thus amount debited = Rs.1, 60,000
Rs.40, 000 is the amount of loading.
If loading is 25% of cost, then the amount debited is Rs.1, 50,000
If the invoice price is Rs.1, 20,000, then the cost of goods sent is Rs.90, 000

Total direct cost of 250 bags = 2, 50,000 + 30,000 = Rs.2, 80,000
            Less: Normal loss of 10 bags                = Nil
Thus, net direct cost of remaining 240-192= 48 bags = 2, 80,000/24048 = 56,000
            Add loading 48200 per bag           = 9,600, i.e. 65,600
If direct cost of bags is taken as 2, 50,000 only, then closing stock at cost will be Rs. 50, 000 and Rs. 59, 600 at an  invoice price.

Cost of invoiced goods = Rs. 4, 00,000
Cost of abnormal loss = 1/10^th of 4, 00,000 = Rs. 40, 000

• Proportionate expenses of Vinay                 = Rs. 2, 500
• Proportionate expenses of Madhav              = Rs. 2, 000
              (18,000/3, 60,000)*40,000
• Commission charged by Madhav                 = Rs. 2, 000
  Total net cost debited = Rs. 46, 500
  Amount credited = 20,000 + 10,000 = Rs. 30, 000
  Net Loss debited to P and L Rs. 16, 500
  If Madhav's expenses or commission is ignored then loss is Rs. 14, 500.
  If both of these are ignored, loss is Rs. 12, 500
  If insurance claim is ignored, loss is Rs. 26, 500

Ordinary + Del-credre commission @ 5% of (750*120) = Rs. 4, 500
Special commission @ 20% of (1, 05,000-90,000)       = Rs. 3, 000
Total commission Rs. 7, 500
If basic rates are taken as % of sales, then commission = 5250 + 3000 = 8250
If basic rates are taken as % of total invoice price then commission = 6000+ 3000 = 9000

Total advance received = Rs.1, 00,000 (80% of 1, 25,000)
            Balance of goods = 1- 3/5 = 2/5
            Advance to retain = 2/5^th of 1, 00,000 = 40,000
Rs. 60,000 is the amount of advance adjusted. If calculation is made out of Rs.1, 25,000 then adjustment amount would be Rs.75, 000 and Rs.50, 000 respectively.

A bill of exchange is always an unconditional order to pay.
A promissory note is an unconditional promise to pay.

The drawee or acceptor accepts the bill. So he is primarily responsible to make payment.
The drawer is the person who draws the bill. The endorser endorses it to the person called endorsee.

If a bill is payable after sight, then the number of days are counted from the date of accepting it but if it is payable after date, then the days are counted from the date of drawing. Thus, in this case, the days will be counted from 12th May and 3 months after the date would be 12th August + 3 days of grace. Thus the bill becomes due on 15th August which is a public holiday. In such case, the bill is payable one day before i.e. 14th August. In case of a sudden holiday, the bill is payable on the next working day.

Amount debited will be 10,000 + 50 = Rs.10, 050.

Total amount due = Rs. 20, 000
            Paid in cash = Rs. 8, 000
            Balance = Rs. 12, 000
            Interest = 12,000*18%*2/12 = Rs. 360
            Amount of bill = 12000 + 360= Rs. 12, 360
If the new bill is for 3 months, then its amount will be Rs. 12, 540
If the new bill is 8000 + Interest, then its amount will be Rs. 8,240 for 2 months bill and Rs. 8,360 for 3 months bill.

Discounting charges of bill = 5,00024%2/12 = Rs. 200
Thus amount received from bank = Rs. 4, 800
Sent to B = Rs. 48001/5 = Rs. 960
If the bill had been discounted on 4th April, with discount charges Rs. 300 and amount sent would be 1/5(5000-300) i.e. Rs. 940. 1/5^th of the face value of bill amounts to Rs. 1, 000. The amount retained by A is 4,800-960 = Rs. 3840

The entry is: co-venturer account_____ Dr. to joint venture account
Co-venturer account is debited. Stock can't be credited.

Joint venture is a temporary or particular partnership as the venture is closed as soon as it is completed.
Consignment is the relation of principal and agent between consignor and consignee. Partnership at will is carried on regularly by the partners as per their will. It is not confined to a particular venture. In a sale contract, goods are sold by seller to buyer.

It is a joint expense, so it is borne by them in their profit ratio.
In case of consignment, discounting charges are borne by the drawer i.e. consignor.

Gross liability of the venturers = 1, 00, 00080% = 80, 000 shares
Shares underwritten by them = 75, 00080% = 60,000 shares
            Net liability = 80, 000 - 60, 000 = 20,000 shares
Net liability can't be 80, 000 - 75, 000 = 5, 000 shares or 1, 00, 000 - 60, 000 = 40, 000 shares

When the venturer records his own transaction only, memorandum account is prepared. When separate set of books are maintained, only one set is maintained separately. In some cases, any one venturer maintains the whole books and in others, the books are maintained by each venturer.

The drawee is required to bear the noting charges in the end.
The noting charges may be paid initially by drawer, endorsee, or bank but ultimately these are recovered from the drawee.

In both these cases, the ownership is passed.

The correct entry is: Joint Venture account_Dr.To Cash account.

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Direct cost of goods = 1/5^th of (1, 25, 000 + 5, 000 + 30, 000) = Rs. 32, 000
If any of the above mentioned amounts is not taken, the answer will be other options.