Question

On May 31. 2023. Pharoah Company consigned 140 treezers, costing $500 each, to Sunland Company. The cost of shipping the freaers amovinted to $800 and was paid by Pharoah. On December 30,2023 , a report was recelved from the consignee indicating that 70 freezers had been sold for $1,050 each. Remittance was made by the consignee for the amount due after deducting a commission of 4% advertising of $280, and total installation costs of $390 on the freezers sold . (a) Calculate the inventory value of the units unsold in the hands of the consignee. Inventory value of units $___

Answer 1

To calculate the inventory value of the units unsold in the hands of the consignee, subtract the number of units sold from the total number of units consigned. In this case, the inventory value of the unsold units is 70 freezers.

Step-by-step explanation:

To calculate the inventory value of the units unsold in the hands of the consignee, we need to subtract the number of units sold from the total number of units consigned.

Given that Pharoah Company consigned 140 freezers and the consignee sold 70 freezers, we can calculate the units unsold as follows:

Units Unsold = Total Consignment - Units Sold = 140 - 70 = 70 freezers

Therefore, the inventory value of the unsold units in the hands of the consignee is 70 freezers.

Answer 2

The inventory value of the unsold units in the hands of the consignee is $110.

To calculate the inventory value of the unsold units in the hands of the consignee, we need to follow these steps:

1. Calculate the total cost of the consigned units:
- The number of units consigned is 140.
- The cost of each unit is $500.
- So, the total cost of the consigned units is 140 * $500 = $70,000.

2. Calculate the total cost of the sold units:
- The consignee sold 70 units.
- The selling price of each unit is $1,050.
- So, the total revenue from the sold units is 70 * $1,050 = $73,500.
- Deduct the commission of 4% from the revenue: 4% of $73,500 = $2,940.
- Deduct the advertising cost of $280.
- Deduct the installation costs of $390.
- So, the total cost of the sold units is $73,500 - $2,940 - $280 - $390 = $69,890.

3. Calculate the inventory value of the unsold units:
- Subtract the cost of the sold units from the total cost of the consigned units:
- $70,000 - $69,890 = $110.