Q.Vijaya of Vijayawada consigned goods worth ₹ 20,000 to his agent Bhavani of Bangalore on consignment. Vijaya spent ₹ 1,000 on transport, ₹ 500 on insurance. Bhavani sent ₹ 5,000 as advance. After two months Vijaya received the account sales as follows :

Cost of goods sent 500 × ₹600 = ₹3,00,000. Consignor's freight & insurance ₹12,000. Consignee's expenses ₹10,000 and 5% commission on ₹4,50,000 = ₹22,500. Sales ₹4,50,000, all stock sold (no closing stock). Consignment profit = 4,50,000 − (3,00,000 + 12,000 + 10,000 + 22,500) = ₹1,05,500. Prasad settles by the ₹1,00,000 bill plus a bank draft of ₹3,17,500.

This is a typical AP Inter 2nd-year (Commerce) consignment question; the consignor's ledger below follows the NCERT/CBSE-aligned commerce method.

Consignment to Tenali Account (in the books of Bhaskar, the consignor)

Prasad's Account (consignee's personal account)

Prepare the Consignment Account, Consignee's (Charan's) Account and Goods Sent on Consignment Account in Dheeraj's books. Value the unsold half of the goods at 21,500 (20,000 proportionate cost + 1,500 proportionate non-recurring expenses). The Consignment Account shows a profit of 19,500, and Charan owes 34,000 after his advance, selling expenses and commission.

This is a standard consignment question from the AP Inter 2nd-year (Class 12) Accountancy previous-year paper; the AP commerce syllabus here follows the same consignment accounting found in the NCERT/CBSE commerce curriculum.

Step 1 — Valuation of unsold (closing) stock

Only consignor's non-recurring expenses (transport 2,000 + insurance 1,000 = 3,000) are added to stock value; Charan's selling expenses are recurring and are not added.

• Cost of unsold half of goods = 40,000 x 1/2 = 20,000
• Non-recurring expenses on unsold half = 3,000 x 1/2 = 1,500
• Closing stock = 20,000 + 1,500 = 21,500

Step 2 — Commission

10% on sales of 48,000 = 4,800.

Step 3 — Consignment Account (in the books of Dheeraj)

Step 4 — Charan's Account (Consignee)

| Particulars | Amount (Rs) | Particulars | Amount (Rs) |

| --- | --- | --- | --- | …

Value the unsold half-stock at Rs. 10,750 (half the Rs. 20,000 cost + half the Rs. 1,500 consignor's expenses), prepare the Consignment Account (profit Rs. 9,650) and Bhavani's Account (balance due Rs. 15,400).

Step 1 — Valuation of unsold stock (half the goods remain unsold)

• Cost of goods unsold = 1/2 x Rs. 20,000 = Rs. 10,000
• Proportionate consignor's non-recurring expenses (transport Rs. 1,000 + insurance Rs. 500 = Rs. 1,500); half = Rs. 750
• (Bhavani's selling expenses are recurring/after-sale and are NOT added to stock)
• Value of closing stock = 10,000 + 750 = Rs. 10,750

Step 2 — Commission = 10% of sales = 10% of Rs. 24,000 = Rs. 2,400

Consignment to Bangalore Account (in the books of Vijaya)

Bhavani's Account (consignee)