Problem: Tingey Industries sells merchandise on a consignment basis to dealers. The selling price of the merchandise averages 25% above cost of merchandise. The dealer is paid a 10% commission on the sale price for all sales made. All dealer sales are made on a cash basis. The following consignment sale activities occurred during 2013:
Manufacturing cost of goods shipped on consignment---------$250,000
Sales price of merchandise sold by dealers-----------------------220,000
Payment made by dealers after deducting commission---------139,000
Instructions:
Q1. Prepare summary entries on the books of the cosigner for these consignment sale transactions
Q2. Prepare summary entries on the books of the dealer consignee, assuming there is only one dealer involved
Q3. Prepare the parts of Tingey Industries' financial statements at December 31, 2013, that relate to these consignment sales.