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.

Renze Joy Candido answered 2 years ago

Next > < Previous

Related Solutions

In the first table in the working papers, you will use one column to determine net income, and the next column to determine net cash flows.

NET PRESENT VALUE PROJECT A PROJECT B Net Cash Flow Present Value divisor or factor @ 8% Present Value ofCash Flows (using math) NetCash Flow Present Value divisor or factor @ 8% Present Value ofCash Flows (using math) Investment (350,000) 1.0000 (350,000) Investment (350,000) 1.0000 (350,000) Year 1 Year 1 Year 2 Year 2 ...

Determine the maximum CCA that is available for 2019. In addition, determine Mr. Bodvin’s minimum net rental income for the year.

Alex Bodvin acquires a residential rental property on June 1, 2019, at a total cost of $423,000. Of this total, $132,000 can be allocated to the value of the land. He immediately spends $42,000 to make major improvements to the property. Rents for the year total $32,000, while rental expenses other than CCA total $27,500. This is the only rental property owned by Mr. Bodvin. Determine the maximum CCA that is available for 2019. In addition, determine Mr. Bodvin’s minimum...

net income

Assume that a company has the following information for the month of March:Revenue: $50,000Cost of Goods Sold: $20,000Operating Expenses: $15,000Taxes: $2,500What is the company's net income for the month of March?

Why is the net income before tax the most common base used to determine the preliminary...

Why is the net income before tax the most common base used to determine the preliminary judgement about materiality? In what circumstances might the auditor use a different base?

Determine the total assets of kirby company at December 31,2017,Determine the net income that kirby company reported for December 2017

Presented below is selected information related to Kirby Company at December 31.Kirby reports financial information monthly Particulars Amount$ Accounts payable 3,000 Cash 6,500 Advertising Expense 6,000 Service Revenue 53,500 Equipment 29,000 Salaries & Wages Expense 16,500 Notes payable 25,000 Rent Expense 10,500 Accounts Receivable 13,500 Owner's Drawings 7,500 (a) Determine the total assets of Kirby Company at December 31,2017 (b) Determine the net income that Kirby Company reported for December 2017 (c)Determine the Owner's equity of Kirby Company at December...

Determine earnings before interest and taxes, net income, and also the cash flow from operations for...

Determine earnings before interest and taxes, net income, and also the cash flow from operations for the following firm: $500,000 sales, $10,000 cash dividends, $300,000 cost of goods sold, $20,000 administrative expense, $20,000 depreciation expense, $40,000 interest expense, $10,000 purchase of productive equipment, no changes in working capital, and a tax rate of 35%.

Why is net income before tax the most common base used to determine the preliminary judgement...

Why is net income before tax the most common base used to determine the preliminary judgement about materiality? In what circumstances might the auditor use a different base?

The total adjustments to net income to determine cash flows from operating activities are……(Hint: be sure...

The total adjustments to net income to determine cash flows from operating activities are……(Hint: be sure to add up changes in current assets and current liabilities as noted on the balance sheet going from year 2017 to year 2018) to get the answer Moore's Family Restaurant Assets & Liabilities as of 12/31/17 Assets & Liabilities projected to 12/31/18 ASSETS ASSETS Cash $492,118.00 Cash $589,118.00 Accounts Receivable $29,000.00 Accounts Receivable $49,095.00 Inventories $30,000.00 Inventories $30,000.00 Prepaid Expenses $2,000.00 Prepaid Expenses $11,000.00...

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

MC Qu. 99 A company had net income... A company had net income of $2,690,000, net...

MC Qu. 99 A company had net income... A company had net income of $2,690,000, net sales of $25,200,000, and average total assets of $8,400,000. Its return on total assets equals: Multiple Choice -312.27%. -33.33%. -10.67%. -32.02%. -3.12%. MC Qu. 109 Carpark Services... Carpark Services began operations in 20X1 and maintains long-term investments in available-for-sale securities. The year-end cost and fair values for its portfolio of these investments follow. The year-end adjusting entry to record the unrealized gain/loss at December...

Subjects