Deepak of Delhi sent goods on consignment to Vivek of Ranchi and charge profit on proforma invoice price at 25% on cost. The agent received commission @ 7% plus 3% delcredere commission on all sales made by him.
Stock with agent at the beginning of the year, 20 bales at proforma price of Rs 5,000, the following transactions took place during the year ended 31st December, 2015 :
(i) 100 bales cosigned at proforma invoice price Rs 25,000.
(ii) Freight and insurance paid by Deepak Rs 1,000
(iii) Advance received from Vivek Rs 10,000.
(iv) Sales made by Vivek
(a) 50 bales for cash Rs 12,500
(b) 40 bales for credit Rs 10,800
(v) Advertising expenses paid by agent Rs 1,200 and brokerage allowed by him Rs 500.
(vi) 15 bales were damaged in transit and Rs 1,400 received as compensation. The damaged case were sold for Rs 1,100.
(vii) Rs 1,500 could not be realised from credit sales.
(viii) The agent remitted the balance amount. Prepare necessary accounts in the books of Deepak.
