Park co. shipped inventory on consignment to recreations co. that cost $50,000. recreations paid $1,200 for advertising that was reimbursable from park. at the end of the year, 80% of the inventory was sold for $70,000. the agreement states that a commission of 30% will be provided to recreations for all sales. what amount of net inventory on consignment remains on the balance sheet for the first year for park?

Question

Reynolds

Business

18 January, 15:15

Park co. shipped inventory on consignment to recreations co. that cost $50,000. recreations paid $1,200 for advertising that was reimbursable from park. at the end of the year, 80% of the inventory was sold for $70,000. the agreement states that a commission of 30% will be provided to recreations for all sales. what amount of net inventory on consignment remains on the balance sheet for the first year for park?

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Moshe Kerr · Answer 1

The answer to this question is 30/100*$50,000 = $15,000 remains on the balance sheet at the end of the year.

The $ 1200 paid for advertisement is not included in the cost of inventory.

Cost of inventory=cost of inventory + any other cost needed to get inventory in place of sale.