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Zorluk: OrtaValuation and Accounting Treatment of Unsold Consignment Stock

Bisi dispatched 250250 bags of rice costing ₦20,000\text{₦}20,000 per bag to Okon on consignment. Bisi incurred freight of ₦150,000\text{₦}150,000 and transit insurance of ₦50,000\text{₦}50,000. Okon took delivery of the goods and paid clearing charges of ₦100,000\text{₦}100,000, godown rent of ₦60,000\text{₦}60,000, and advertising expenses of ₦40,000\text{₦}40,000. At the end of the period, Okon had sold 200200 bags. What is the value of the unsold consignment stock?

  1. ₦1,060,000\text{₦}1,060,000Cevap
  2. B
    ₦1,040,000\text{₦}1,040,000
  3. C
    ₦1,080,000\text{₦}1,080,000
  4. D
    ₦1,000,000\text{₦}1,000,000

Cevap

₦1,060,000\text{₦}1,060,000
The value of unsold consignment stock is determined by adding the proportionate share of all non-recurring expenses (incurred by both consignor and consignee) to the basic cost price of the unsold units. In this scenario, 5050 out of 250250 bags (20%20\%) remain unsold. The cost is ₦1,000,000\text{₦}1,000,000. Consignor expenses (freight and insurance) total ₦200,000\text{₦}200,000, of which 20%20\% is ₦40,000\text{₦}40,000. Consignee direct non-recurring expenses (clearing charges) are ₦100,000\text{₦}100,000, of which 20%20\% is ₦20,000\text{₦}20,000. Godown rent and advertising are recurring selling expenses and are excluded. Thus, total stock value = ₦1,000,000+₦40,000+₦20,000=₦1,060,000\text{₦}1,000,000 + \text{₦}40,000 + \text{₦}20,000 = \text{₦}1,060,000.

Adım Adım Çözüm

1
Calculate the number and cost price of unsold bags
Unsold quantity = 250−200=50250 - 200 = 50 bags. Cost of unsold stock = 50×₦20,000=₦1,000,00050 \times \text{₦}20,000 = \text{₦}1,000,000.
Unsold stock ratio is 50250=15\frac{50}{250} = \frac{1}{5} (or 20%20\%).
2
Calculate the proportionate share of consignor's direct non-recurring expenses
Total consignor expenses = ₦150,000+₦50,000=₦200,000\text{₦}150,000 + \text{₦}50,000 = \text{₦}200,000. Proportionate share = 15×₦200,000=₦40,000\frac{1}{5} \times \text{₦}200,000 = \text{₦}40,000.
All expenses paid by consignor to bring goods into saleable location/condition are non-recurring and must be apportioned.
3
Identify and calculate the proportionate share of consignee's direct non-recurring expenses
Consignee direct non-recurring expense (clearing charges) = ₦100,000\text{₦}100,000. Proportionate share = 15×₦100,000=₦20,000\frac{1}{5} \times \text{₦}100,000 = \text{₦}20,000.
Godown rent (₦60,000\text{₦}60,000) and advertising (₦40,000\text{₦}40,000) are recurring/selling expenses and must be excluded from stock valuation.
4
Sum up the components to find total valuation of unsold stock
Valuation = ₦1,000,000+₦40,000+₦20,000=₦1,060,000\text{₦}1,000,000 + \text{₦}40,000 + \text{₦}20,000 = \text{₦}1,060,000.
Total value of unsold consignment stock includes prime cost plus proportionate direct non-recurring expenses of both consignor and consignee.

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Valuation of Unsold Consignment Stock
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Valuation and Accounting Treatment of Unsold Consignment Stock

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