1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
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. Profit or loss on consignment _______________.

A
Rs.4000
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
B
Rs.2000
No worries! Weâ€˜ve got your back. Try BYJUâ€˜S free classes today!
C
Rs.6000
No worries! Weâ€˜ve got your back. Try BYJUâ€˜S free classes today!
D
Rs.5000
No worries! Weâ€˜ve got your back. Try BYJUâ€˜S free classes today!
Open in App
Solution

## The correct option is D Rs.4000Cost of goods sent on consignment = Rs. 50,000Expenses incurred by the consignor = freight + insurance = Rs. 1,500 + Rs. 500 = Rs. 2,000Expenses incurred by the consignee = unloading + rent = Rs. 500 + Rs. 500 = Rs. 1,000Commission payable to B = 5% of sales = 5% x Rs. 60,000 = Rs.3,000Amount Remitted by B to A after deducting commission and expenses incurred by him = Rs. 60,000 - Rs. 3,000 - Rs. 1,000 = Rs. 56,000Profit on consignment = Amount received from B for sale of goods sent on consignment - Cost of goods sold - Expenses incurred by A = Rs. 56,000 - Rs. 50,000 - Rs. 2,000 = Rs. 4,000

Suggest Corrections
0
Join BYJU'S Learning Program
Related Videos
Questions
MATHEMATICS
Watch in App
Explore more
Join BYJU'S Learning Program