Question

A sends goods worth Rs. 50,000 to B for sales for 5% commission. He incurs Rs. 1,500 for freight and Rs. 500 for insurance. The goods are sold for Rs. 60,000, consignee incurs Rs. 500 unloading expenses and Rs. 500 rent.B sends a draft after reducing his expenses and commission. What will be the profit or loss on consignment?

• A. Rs. 4,000
• B. Rs. 2,000
• C. Rs. 6,000
• D. Rs. 5,000

Answer 1

Answer: (A)

Rs. 4,000

Consignment Account
Particulars	Rs	Particulars	Rs
Goods sent on consignment	50000	By sales	60000
Freight	1500
Insurance	500
Unloading	500
Rent	500
Commission	3000
Profit	4000
Total	60000	Total	60000