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Solve this ASAP. D of Delhi appointed A of Agra as its selling agent on the following terms: Goods to be sold at invoice price
Solve this ASAP.
D of Delhi appointed A of Agra as its selling agent on the following terms: Goods to be sold at invoice price or over. A to be entitled to a commission of 7.5% on the invoice price and 20% of any surplus price realized over invoice price The principals to draw on the agent a 30 days bill for 80% of the invoice price. On 1st February, 2020, 1,000 cycles were consigned to A, each cycle costing 640 including freight and invoiced at 800 . Before 31st March, 2020, (when the principal's books are closed) A met his acceptance on the due date: sold off 820 cycles at an average price of 930 per cycle, the sale expenses being 12,500; and remitted the amount due by means of Bank draft. Twenty of the unsold cycles were shop-spoiled and were to be valued at a depreciation of 50% of cost. Show by means of ledger accounts how these transactions would be recorded in the books of A and find out the value of closing inventory with A to be recorded in the books of D at costStep by Step Solution
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