BCMM shipped 60 custom mufflers at a cost of $135.00 each to CGHRS. The mufflers...
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BCMM shipped 60 custom mufflers at a cost of $135.00 each to CGHRS. The mufflers were shipped on August 1, 2021 on consignment. BCMM incurred $300 of freight related costs in shipping the mufflers to Charlie. The consignment agreement requires CGHRS to sell and install the mufflers at $265.00 each to customers only within Contra Costa County. BCMM pays a $75 commission to CGHRS for each muffle sold and installed. In addition, BCMM allows Charlie a monthly advertising allowance of $250. The agreement also requires CGHRS to submit an accounting at the end of each month showing the sales/installations for the month and the inventory still on hand at month end. In addition to submitting the report, CGHRS is required to remit full payment to BCMM for all mufflers sold/installed less commissions and monthly advertising allowance. The report received from CGHRS for the month of August 2021 indicated the following. Mufflers Sold/Installed 28 Mufflers on Hand 32 Required: a. Prepare a detailed calculation showing the value of BCMM's consignment inventory at August 31st. b. Prepare a detailed calculation of BCMM's profit on its consignment inventory for the month of August. c. Prepare a detailed calculation of the amount of cash BCMM is to receive from CGHRS for the month of August. d. Reconcile BCMM's cash to be received, to its net profit BCMM shipped 60 custom mufflers at a cost of $135.00 each to CGHRS. The mufflers were shipped on August 1, 2021 on consignment. BCMM incurred $300 of freight related costs in shipping the mufflers to Charlie. The consignment agreement requires CGHRS to sell and install the mufflers at $265.00 each to customers only within Contra Costa County. BCMM pays a $75 commission to CGHRS for each muffle sold and installed. In addition, BCMM allows Charlie a monthly advertising allowance of $250. The agreement also requires CGHRS to submit an accounting at the end of each month showing the sales/installations for the month and the inventory still on hand at month end. In addition to submitting the report, CGHRS is required to remit full payment to BCMM for all mufflers sold/installed less commissions and monthly advertising allowance. The report received from CGHRS for the month of August 2021 indicated the following. Mufflers Sold/Installed 28 Mufflers on Hand 32 Required: a. Prepare a detailed calculation showing the value of BCMM's consignment inventory at August 31st. b. Prepare a detailed calculation of BCMM's profit on its consignment inventory for the month of August. c. Prepare a detailed calculation of the amount of cash BCMM is to receive from CGHRS for the month of August. d. Reconcile BCMM's cash to be received, to its net profit
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