91Ó°ÊÓ

Freight expenditure is the fee charged by a carrier for transporting cargo to a destination locationfrom a source location. The individual who wants the items carried from one site to other isresponsible for the cost.

Working Notes:

Revenue from consignment sales = $21,500

Commission Retained = 10%

$\begin{array}{rcl}\mathrm{Commision}\mathrm{expense}& =& \mathrm{Revenue}\mathrm{from}\mathrm{sales}×\mathrm{Commission}\mathrm{retained}\\ & =& \$21,500×10\%\\ & =& \$2,150\end{array}$

Advertising Expense = $500

$\begin{array}{rcl}\mathrm{Cash}& =& \mathrm{Revenue}\mathrm{from}\mathrm{sale}-\left(\mathrm{Advertising}\mathrm{expense}+\mathrm{Commission}\mathrm{expenses}\right)\\ & =& \$21,500-\left(\$500+\$2,150\right)\\ & =& \$21,500-\$2,650\\ & =& \$18,850\end{array}$

Jansen co. shipped merchandise of cost = $20,000

Freight cost paid by Jansen = $2,000

$\begin{array}{rcl}\mathrm{Total}\mathrm{cost}\mathrm{of}\mathrm{merchandise}& =& \mathrm{Merchandise}\mathrm{cost}+\mathrm{Freight}\mathrm{cost}\\ & =& \$20,000+\$2,000\\ & =& \$22,000\end{array}$

Only 60% of merchandise has been sold by the end of the year.

$\begin{array}{rcl}\mathrm{Cost}\mathrm{of}\mathrm{goods}\mathrm{sold}& =& \mathrm{Total}\mathrm{cost}\mathrm{of}\mathrm{merchandise}×\mathrm{Merchandise}\mathrm{sold}\\ & =& \$22,000×60\%\\ & =& \$13,200\end{array}$