Question

In: Accounting

Determine the net income of the consignor.

A well-known consignor consigned goods costing $1,560,000 to be sold at a total advertised selling price of $3,120,000. The consignee remitted $1,422,600 to its consignor after deducting the following charges: $52,500 cartage, $22,500 installation, and a commission equal to 20% of the sales proceeds after deducting the commission. Determine the net income of the consignor.

Solutions

Expert Solution

Step 1: Determine the percentage of items sold over items consigned during the period.

Remittance 1,422,600
Cartage 52,500
Installation 22,500
Net remittance after commission 1,497,600
Add commission (20%) 299,520
Proceeds from sale of goods 1,797,120
Divided by total advertised price 3,120,000
Percentage of units sold 57.60%

 

Step 2: Compute for the net income.

Revenue from sale 1,797,120
Cost of sales:  
Purchase price (1,560,000 x 57.6%) (898,560)
Cartage (52,500 x 57.6%) (30,240)
Gross profit 868,320
Installation (22,500)
Commission (299,520)
Net income 546,300

 

 


Net income is $546,300.

Related Solutions

net income equals
Cushman Company had $818,000 in sales, sales discounts of $12,270, sales returns and allowances of $18,405, cost of goods sold of $388,550, and $281,395 in operating expenses. Net income equals: (a) $7,87,325 (b) $1,17,380 (c) $3,98,775 (d) $1,78,730 (e) $1,48,055  
Net Present Value
NBA stars Kevin Durant and Chris Paul own a company that faces a 40% tax rate and uses a 14% discount rate. They just invested $677,000 in equipment for the banking app “Goalsetter” that would be depreciated on a straight-line basis to zero over the 6-year life of the project. The equipment will be salvaged for $182,000 at the end of the project. Kevin Durant and Chris Paul know that the project's operating cash flow will be $165,300 per year. What is the NPV of this project if it...
Net present Value
Company A wishes to invest in 4 projects X, W, Y & Z whose net benefits are given in the table below. Project Years   0 1 2 3 4 W (1000) 1200 0 0 0 X (1361.1) 500 500 500 500 Y (1000) 1200 1500 0 0 Z (2000) 1000 0 0 0 Using a discount rate of 10% appraise the 4 projects using the NPV criteria.
Multistep income statement
Below is a partial listing of the adjusted account balances of yates Co at year end on december 31 ,2018 Cost of Goods sold-$ 212,000 Freight out- $7,000 insurance expense-$ 12,000 Rent expense- $32,000 Salaries Expense-$62,000 Sales Discount-$ 8,000 Sales Return and allowances-$ 17,000 Sales-$ 370,000 Prepare a multi step Income statement .assume 25% income tax rate.
What is the Residual Income?
Jarren Cough drops operates two divisions. The following information pertains to each division for year 1.   Required   Compute each division’s residual income. Which division increased the company’s profitability more?
The company's net sales for 200B was
The following information pertains to Cenon Company for 200B: Accounts receivable, January 1, 200B 8,000 Accounts receivable, December 31, 200B 9,600 Net Cash Sales 3,200 Accounts Receivable turnover for 200B 5 times   The company's net sales for 200B was a. 47,200 b. 88,000 c. 51,200 d. 48,000
The projected income before tax is?
A family friend, Mr. Burn Out availed of the early retirement scheme offered by his employer. He said that he was already tired of the same routine of spending eight full hours in an office doing the same thing for the last twenty years. Mr. Burn Out plans to get into the field of entrepreneurship. He would invest part of his retirement pay in a business that would deal with the sale of medical supplies to local clinics and hospitals....
Return on Investments and Residual income
Baird Home Maintenance Company earned operating income of $6,587,900 on operating assets of $58,300,000 during Year 2. The Tree Cutting Division earned $1,242,260 on operating assets of $6,940,000. Baird has offered the Tree Cutting Division $2,070,000 of additional operating assets. The manager of the Tree Cutting Division believes he could use the additional assets to generate operating income amounting to $432,630. Baird has a desired return on investment (ROI) of 9.30 percent.Required Calculate the return on investment for Baird, the...
Enter an increase as a positive number and a decrease as a negative number. Change in income for Division A $ Change in income for Division B $ Total change in income for Hibiscus Company ?
The materials used by the Hibiscus Company Division A are currently purchased from outside supplier at $52 per unit. Division B is able to supply Division A with 17,500 units at a variable cost of $50 per unit. The two divisions have recently negotiated a transfer price of $48 per unit for the 17,500 units. By how much will each division's income and the company's total income change as a result of this transfer? Enter an increase as a positive...
Income Statement and Classified Balance sheet
Harvey Specter started his own firm, Specter Co. on .July I, 2011. The list of different Account titles with respective balance  (each account has a normal balance) at September 30, 20l3 as follows                                        Specter Co.                                            List or Accounls                                                      ...