On May 15, 20x7, Japan Sales Company received a shipment of merchandise

with a selling price of P15,000 from China Company. The consignment

agreement provided for a sale of merchandise on credit with terms of 2/10, n/30.

The commission of 15% was to be based on the accounts receivable collected by

the consignee. Cash discounts taken by customers, expenses applicable to

goods on consignment and any cash advanced to the consignor were deductible

from the remittance by the consignee.

Japan Sales Company advanced P6,000 to China Company upon receipt of the

shipment. Expenses of P80,000 was paid by Japan. By June, 20x7, 70% of the

shipment had been sold, and 80% of the resulting accounts receivable had been

collected, all within the discount period. Remittance of the amount due was made

June 30, 20x7.

The consigned goods cost China Company P10,000 and freight charges of

P120,000 had been paid to ship it to Japan sales Company.

The cash remitted by Japan Sales Company and the cost of inventory on

consignment are: