In 20x1, Seth Wholesalers transferred goods to a retailer on consignment. The goods cost P225,000 and are normally sold at a 50% mark-up. Seth paid P5,000 freight cost, while the retailer paid P4,000 advertising and P1,500 freight cost. The parties agreed that Seth Wholesalers would reimburse the cost of advertising and freight paid by the retailer. During the year, the retailer sold 70% of the merchandise at the normal mark-up. The retailer withheld a 12% commission from payment plus the amount reimbursable by the consignor. REQUIRED: 1. Net income recognized by Seth Wholesalers 2. Amount remitted by the retailer 3. Value of unsold inventory

In 20x1, Seth Wholesalers transferred goods to a retailer on consignment. The goods cost P225,000 and are normally sold at a 50% mark-up. Seth paid P5,000 freight cost, while the retailer paid P4,000 advertising and P1,500 freight cost. The parties agreed that Seth Wholesalers would reimburse the cost of advertising and freight paid by the retailer. During the year, the retailer sold 70% of the merchandise at the normal mark-up. The retailer withheld a 12% commission from payment plus the amount reimbursable by the consignor. REQUIRED: 1. Net income recognized by Seth Wholesalers 2. Amount remitted by the retailer 3. Value of unsold inventory

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 7MCQ

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