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FR Assignment 1

The document outlines an assignment for BCM 3103 Financial Reporting at Dedan Kimathi University of Technology, requiring students to prepare consignment and consignee accounts based on two scenarios involving sales of goods. The first scenario involves woollen goods consigned from Linda to Rehema, detailing sales and associated costs. The second scenario involves glassware consigned from KIM & Co to Onyango and Co, also requiring the preparation of accounts based on sales and expenses incurred.

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7 views1 page

FR Assignment 1

The document outlines an assignment for BCM 3103 Financial Reporting at Dedan Kimathi University of Technology, requiring students to prepare consignment and consignee accounts based on two scenarios involving sales of goods. The first scenario involves woollen goods consigned from Linda to Rehema, detailing sales and associated costs. The second scenario involves glassware consigned from KIM & Co to Onyango and Co, also requiring the preparation of accounts based on sales and expenses incurred.

Uploaded by

allanchumba68
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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DEDAN KIMATHI UNIVERSITY OF TECHNOLOGY (DeKUT)

SCHOOL OF BUSINESS
ASSIGNMENT 1 FOR BCM 3103 FINANCIAL REPORTING
INSTRUCTIONS ANSWER ALL THE QUESTIONS
Question ONE
On 1st September 2011 Linda of Nairobi despatches on consignment to Rehema of
Lamu 50 cases of woollen goods invoiced proforma at Kshs 150 per case to be sold
by the latter on the consignor’s account. A commission of 3% is payable to Rehema
upon sales and all charges are borne by Linda.

Linda pays freight and insurance to Rehema amounting to Kshs 510 and draws upon
Rehema at 3 months’ for Kshs 4,500 against despatch.

Rehema sells for cash 10 cases at Kshs 180 a case on 1st October 2011, 25 cases at
Kshs 202.50 a case on 10th October, and the balance on 30th October 2011, at Kshs
195 a case.

She forwarded an Account sales to Linda on 2nd November, 2011 deducting the
commission and charges incurred, such charges amounting to Kshs 405 for unloading,
cartage, storage etc and remit the draft for the balance.

Required:
i) Consignment account (3 marks)
ii) Consignees account (2 marks)

Question TWO
KIM & Co of Nairobi consigned on 15th March2008, 45 cases of glassware (cost
price = Sh.41,235) to Onyango and Co for sale at a commission of 5% of gross sales
proceeds. The consignor paid freight and carriage amounting to Sh.539.
The goods arrived at Kisumu on 20th March 2008, and Onyango and Co. paid railway
clearing charges Sh235, sundry charges sh 59, Carriage sh102, and godown charges
Sh90.
The goods were sold by Onyango and Co. as:
 15 cases at Sh1,003 per case,
 22 cases at Sh1,050 per case, and
The remainder at Sh10,000 (total value)
On 21st June 2008, Onyango and Co sent a draft for Sh10,000 to KIM & Co. on
account.
On 1st July 2008, Onyango and Co forwarded an account sale together with a bill of
exchange for the balance.

Required:
Prepare the necessary accounts to record the above transactions in the books of both
parties. (6 marks)

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