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Q: Vandana Traders of Delhi purchased 10,000 pieces of Sarees @ Rs.100 per Saree. Out of these Sarees, 6,000 Sarees were sent on consignment to Vastralaya of Jabalpur at the selling price of Rs.120 per Saree. The consignors paid Rs.3,000 for packaging and freight.
Vastralaya sold 5,000 Sarees at Rs.125 per Saree and incurred Rs.1,000 for selling expenses and remitted Rs.5,00,000 to Delhi on account. They are entitled to a commission of 5% on total sales plus a further 20% commission on any surplus price realised over Rs.120 per Saree.
3,000 Sarees were sold at Rs.110 per Saree.
Owing to fall in market price, the value of the inventories of Sarees in hand is to be reduced by 10%.
Prepare the Consignment Account and Trading Account in the books of Vandana Traders and their account in the books of the agents Messrs Vastralaya of Jabalpur.