Q.Dheeraj of Vijayawada consigned goods worth ₹ 40,000 to his agent Charan of Chennai on consignment. Dheeraj spent ₹ 2,000 on transport, ₹ 1,000 on Insurance.
Charan sent ₹ 7,000 as advance. After two months. Dheeraj received the account sales for as follow :

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)

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