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Bridging Instruction Program ACP 311 Week 6-7

This document discusses accounting concepts related to consignment and installment sales. Specifically, it provides information about appliances shipped on consignment by The Western Appliance Center to the ABC Store in November 2020. It also provides data about installment sales for Donna Company in 2019 and 2020, including installment sales amounts, gross profit percentages, and cash collections. Finally, it provides data for Eugene Corp for their installment sales in 2020, including ending installment accounts receivable, installment sales, and gross profit percentage. It tests understanding of calculating cost of inventory on consignment, profit on consignment, amounts remitted to consignor, and realized gross profit on installment sales.

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Shenny Ann Luayon
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137 views3 pages

Bridging Instruction Program ACP 311 Week 6-7

This document discusses accounting concepts related to consignment and installment sales. Specifically, it provides information about appliances shipped on consignment by The Western Appliance Center to the ABC Store in November 2020. It also provides data about installment sales for Donna Company in 2019 and 2020, including installment sales amounts, gross profit percentages, and cash collections. Finally, it provides data for Eugene Corp for their installment sales in 2020, including ending installment accounts receivable, installment sales, and gross profit percentage. It tests understanding of calculating cost of inventory on consignment, profit on consignment, amounts remitted to consignor, and realized gross profit on installment sales.

Uploaded by

Shenny Ann Luayon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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College of Accounting Education

3/F F. Facundo Hall, B & E Bldg.


Matina, Davao City Philippines
Phone No.: (082) 305-0645

BRIDGING INSTRUCTION PROGRAM


ACP 311
Week 6-7
Consignment

1. On November 5, 2020, The Western Appliance Center ships five (5) of its appliances to the ABC
Store on consignment. Each unit is to be sold at P25,000 payable P5,000 in the month of
purchase and P1,000 per month thereafter. The consignee is to be entitled to 20% of all
amounts collected on consignment sales. ABC store sells three (3) appliances in November and
one (1) on December. Regular monthly collections are made by the consignee, and appropriate
cash remittances are made to the consignor at the end of each month. The cost of the
appliances shipped by the consignor was P15,500 per unit. The consignor paid shipping costs to
the consignee totalling P5,000.

The cost of inventory on consignment on December 31, 2020 is:


A. P15,500
B. P16,500
C. P19,600
D. P24,500

2. Using the same information in No. 1 the profit on consignment for 2020 is:

A. P29,400
B. P15,500
C. P15,000
D. P14,000

3. Using the same information in No. 1, the total amount remitted to consignor for the year 2020
is:

A. P23,000
B. P18,400
C. P12,000
D. 6,400
College of Accounting Education
3/F F. Facundo Hall, B & E Bldg.
Matina, Davao City Philippines
Phone No.: (082) 305-0645

Installment Sales

4. Donna Company began operations on January 1, 2019 and appropriately uses the installment
sales method of accounting. The following data are available for 2019 and 2020:

2019 2020
Installment Sales P1,500,000 P1,800,000
Gross Profit on sales 30% 40%
Cash Collection from:
2019 sales 500,000 600,000
2020 sales - 700,000

The realized gross profit for 2020 is:


A. P720,000
B. P520,000
C. P460,000
D. P280,000

5. Eugene Corp., which began business on January 1, 2020, appropriately uses the installment sales
method of accounting for income tax reporting purposes. The following data are available for
2020:

Installment accounts receivable, 12/31/20 P200,000


Installment sales for 2020 350,000
Gross Profit on sales 40%
College of Accounting Education
3/F F. Facundo Hall, B & E Bldg.
Matina, Davao City Philippines
Phone No.: (082) 305-0645

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