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Zorluk: Çok zorValuation and Accounting Treatment of Unsold Consignment Stock

Tunde consigned 600600 cases of electrical appliances costing ₦15,000\text{₦}15,000 per case to Chidi. Tunde incurred freight charges of ₦360,000\text{₦}360,000, transit insurance of ₦180,000\text{₦}180,000, and loading costs of ₦60,000\text{₦}60,000. Upon receiving the goods, Chidi paid dock dues of ₦120,000\text{₦}120,000, clearing charges of ₦180,000\text{₦}180,000, godown rent of ₦90,000\text{₦}90,000, and advertising expenses of ₦60,000\text{₦}60,000. At the end of the accounting period, Chidi had successfully sold 450450 cases.

What is the correct valuation of the unsold consignment stock to be credited to the Consignment Account?

  1. ₦2,475,000\text{₦}2,475,000Cevap
  2. B
    ₦2,550,000\text{₦}2,550,000
  3. C
    ₦2,400,000\text{₦}2,400,000
  4. D
    ₦2,250,000\text{₦}2,250,000

Cevap

₦2,475,000\text{₦}2,475,000
The valuation of unsold consignment stock consists of the basic cost of unsold units plus a proportionate share of all direct (non-recurring) expenses incurred by both the consignor and the consignee. Here, 150150 out of 600600 cases (25%25\%) remain unsold. Basic cost = ₦2,250,000\text{₦}2,250,000. Proportionate consignor expenses (freight, transit insurance, loading) = 25%×₦600,000=₦150,00025\% \times \text{₦}600,000 = \text{₦}150,000. Proportionate consignee non-recurring expenses (dock dues and clearing charges) = 25%×₦300,000=₦75,00025\% \times \text{₦}300,000 = \text{₦}75,000. Adding these together yields ₦2,475,000\text{₦}2,475,000.

Adım Adım Çözüm

1
Determine the proportion of unsold consignment stock.
Unsold cases = 600−450=150600 - 450 = 150 cases. Unsold fraction = 150600=14\frac{150}{600} = \frac{1}{4} (or 25%25\%).
Stock valuation requires calculating the proportionate cost and direct expenses for the unsold units.
2
Calculate the basic cost price of the unsold units.
150 cases×₦15,000=₦2,250,000150 \text{ cases} \times \text{₦}15,000 = \text{₦}2,250,000.
The base value of inventory is calculated using the unit purchase/cost price.
3
Calculate the proportionate direct expenses incurred by the consignor (Tunde).
Total consignor expenses = ₦360,000+₦180,000+₦60,000=₦600,000\text{₦}360,000 + \text{₦}180,000 + \text{₦}60,000 = \text{₦}600,000.
Proportionate consignor expenses = 14×₦600,000=₦150,000\frac{1}{4} \times \text{₦}600,000 = \text{₦}150,000.
All direct expenses paid by the consignor to bring goods into location and condition must be apportioned to unsold stock.
4
Identify and calculate proportionate non-recurring direct expenses incurred by the consignee (Chidi).
Consignee non-recurring expenses = Dock dues (₦120,000\text{₦}120,000) + Clearing charges (₦180,000\text{₦}180,000) = ���300,000\text{���}300,000.
Proportionate consignee non-recurring expenses = 14×₦300,000=₦75,000\frac{1}{4} \times \text{₦}300,000 = \text{₦}75,000.
(Note: Godown rent and advertising are recurring selling/administrative expenses and are excluded).
Only non-recurring direct expenses paid by the consignee prior to goods reaching the warehouse are added to stock valuation.
5
Sum up the basic cost and proportionate direct expenses to get total stock valuation.
Total Stock Value = ₦2,250,000+₦150,000+₦75,000=₦2,475,000\text{₦}2,250,000 + \text{₦}150,000 + \text{₦}75,000 = \text{₦}2,475,000.
Unsold consignment stock valuation includes cost price plus proportionate consignor direct expenses plus proportionate consignee direct non-recurring expenses.

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