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Q: X of Delhi purchased 10,000 metres of cloth for Rs.2,00,000 of which 5,000 metres were sent on
consignment to Y of Agra at the selling price of Rs.30 per metre. X paid Rs.5,000 for freight and Rs.500 for packing etc.
Y sold 4,000 metre at Rs.40 per metre and incurred Rs.2,000 for selling expenses. Y is entitled to a commission of 5% on total sales proceeds plus a further 20% on any surplus price realised over Rs.30 per metre. 3,000 metres were sold at Delhi at Rs.30 per metre less Rs.3,000 for expenses and commission. Owing to fall in market price, the Inventories of cloth in hand is to be reduced by 10%.
Prepare the Consignment Account and Trading and Profit & Loss Account in Books of X.