Tingey Industries sells merchandise on a consignment basis to dealers. Shipping costs are chargeable to Tingey. although in some cases the dealer pays them. The selling price of the merchandise averages 25% above cost of merchandise exclusive of freight. The dealer is paid a 10% commission on the sales price for all sales made. All dealer sales are made on a cash basis. The following consignment sales activities occurred during 2002.

Instructions:
1 . Prepare summary entries on the books of the consignor for these consignment sales transactions.
2. Prepare summary entries on the books of the dealer consignee, assuming there is only 1 dealer involved.
3. Prepare the parts of Tingey Industries' financial statements at December 31, 2002, that relate to these consignment sales.

Transcribed Image Text:

Manufacturing cost of goods shipped on consignment Freight costs incurred: Paid by Tingey Industries Paid by dealer Sales price of merchandise sold by dealers Payments made by dealers after deducting commission and freight costs $250,000 $15,000 5,000 20,000 210,000 139,000