What do you understand by invoice price? Name the items which are recorded at the invoice price in the consignment account. Give journal entries passed for the adjustment of loading the respect of each item.

The Consignor, rather than sending the products on dispatch at cost, may send it at a cost higher than the cost. This cost is known as Invoice Price or Selling Price. The distinction between the cost and the receipt cost of products is known as stacking or the higher cost over the cost. This is finished with a view to keep the benefits on relegation mystery.

In that capacity, proctor couldn’t know the genuine benefit made on dispatch. Consequently the dispatcher sends the Proforma receipt at a higher cost than the cost. At the point when the distributor records the exchange in his book at receipt value, some extra passages must be passed keeping in mind the end goal to dispose of the overabundance cost and to touch base at the right benefit or misfortune on dispatch.

Things on Which Excess Price is to be Calculated:

Abundance Price or Loading is to be computed on the accompanying things:

Commercials:

1. Relegation stock toward the start

2. Products sent on relegation

3. Products returned by the agent

4. Committal stock toward the finish of the period

(a) To Remove the Excess Price in the Opening Stock:

Committal Stock Reserve A/c Dr.

Promotions:

To Consignment Account

(Being the abundance benefit of opening stock is conveyed down to cost)

(b) To Remove the Excess Price in the Goods Sent on Consignment:

Products sent on Consignment Account Dr.

Promotions:

To Consignment Account

(Being the distinction between the receipt cost and cost is balanced)

(c) To Remove the Excess Price in Goods Return:

Committal Account Dr.

Promotions:

To Goods sent on Consignment A/c

(Being to cut down the estimation of products to cost)

(d) To Remove the Excess Price in Closing Stock:

Committal Account Dr.

To Consignment Stock Reserve A/c

(Being the abundance estimation of stock is balanced)

In any case, these alterations are not required in proctor’s book. Receipt cost does not influence the recipient. At the point when the stock is appeared to be determined Sheet, in Consignor’s Book, the Consignment Stock Reserve is deducted.

Representation:

Arun relegated 100 smaller than usual toy autos to Sanjoy to be sold at his hazard. The cost of one little toy auto was Rs 150, yet the receipt cost was Rs 200. Arun paid cargo Rs 600 and protection in travel Rs 200.

Sanjoy sent a bank draft for Rs 10,000 as propel installment and later sent an Account Sales demonstrating that 80 toy autos were sold at Rs 220 each.