Le Sserafim Industries sells merchandise to dealers on a consignment basis. Shipping costs are chargeable to Le Sserafim, although in some cases, the dealer pays them, while advertising costs are reimbursable from the consignor. The selling price of the merchandise averages 40% above cost of merchandise, exclusive of freight. The dealer is paid a 10% commission on the sales price for all sales made. All dealer sales are made on cash basis. The following consignment sales activities occurred during the current year. Units shipped 100 Unit cost P10,000 Freight cost incurred: Paid by Le Sserafim 75,000 Paid by consignee 25,000 Advertising costs paid by consignee 50,000 At the end of the month, the consignor receives a notification from the consignee that 80 units were sold and that the amount due to consignor is enclosed.

Le Sserafim Industries sells merchandise to dealers on a consignment basis. Shipping costs are chargeable to Le Sserafim, although in some cases, the dealer pays them, while advertising costs are reimbursable from the consignor. The selling price of the merchandise averages 40% above cost of merchandise, exclusive of freight. The dealer is paid a 10% commission on the sales price for all sales made. All dealer sales are made on cash basis. The following consignment sales activities occurred during the current year. Units shipped 100 Unit cost P10,000 Freight cost incurred: Paid by Le Sserafim 75,000 Paid by consignee 25,000 Advertising costs paid by consignee 50,000 At the end of the month, the consignor receives a notification from the consignee that 80 units were sold and that the amount due to consignor is enclosed.

Name: 1. How much is the value of inventory in the hands of consignee?2. How
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Description: 1. How much is the value of inventory in the hands of consignee?2. How much is the net Income to be reported by Le Sserafim?3. How much is the amount remitted by the dealer to Le Sserafim? Le Sserafim Industries sells merchandise to dealers on a cons

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter16: Multistate Corporate Taxation

Section: Chapter Questions

Problem 43P

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Vernon Industries sells merchandise to dealers on a consignment basis. Shipping costs are chargeable toVernon, although in some cases, the dealer pays them, while advertising costs are reimbursable from theconsignor. The selling price of the merchandise averages 40% above cost of merchandise, exclusive offreight. The dealer is paid a 10% commission on the sales price for all sales made. All dealer sales are madeon cash basis. The following consignment sales activities occurred during the current year.Units shipped 100Unit cost P10,000Freight cost incurred:Paid by Vernon 75,000Paid by consignee 25,000Advertising costs paid by consignee 50,000At the end of the month, the consignor receives a notification from the consignee that 80 units were sold andthat the amount due to consigner is enclosed. REQUIRED:3. Value of inventory in the hands of the consignee ____________4. Net income to be reported by the consignor ____________5. Amount remitted to the consignor
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Vernon Industries sells merchandise to dealers on a consignment basis. Shipping costs are chargeable to Vernon, although in some cases, the dealer pays them, while advertising costs are reimbursable from the consignor. The selling price of the merchandise averages 40% above cost of merchandise, exclusive of freight. The dealer is paid a 10% commission on the sales price for all sales made. All dealer sales are made on cash basis. The following consignment sales activities occurred during the current year. Units shipped 100 Unit cost P10,000 Freight cost incurred: Paid by Vernon 75,000 Paid by consignee 25,000 Advertising costs paid by consignee 50,000 At the end of the month, the consignor receives a notification from the consignee that 80 units were sold and that the amount due to consigner is enclosed. REQUIRED: Value of inventory in the hands of the consignee Net income to be reported by the consignor…
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