Verify Consignee Formula with airSlate SignNow

Verify consignee formula

[Applause] welcome to the accounting superstar channel the place to learn accounting I'm professor Don Bush I've been teaching accounting for about 30 years and been a CPA for about that long also I've got great ways to explain it do you will understand it today's lesson is about consignment sales it's really very easy today I'm wearing an Armani sport coat and I looked on the internet to see how much these things sell for and they go anywhere from about $1,000 to $2,000 but I didn't pay that much money I bought it at a consignment shop so what's a consignment shop somebody brought this Armani sport coat into the consignment shop and the consignment shop sold this sport coat to me on behalf of the seller and I only paid ninety four dollars for it so sometimes consignment can be a great way to go if you want to get some good quality things at a good price so on to the lesson for today consignment sales so we're talking about Fred snow blower service Fred owns a snowblower service repair shop up in Breckenridge Colorado thread the consign II will oftentimes sell you snowblowers for other people that consign or so Fred accepts snow blowers from other people so he is the consign II and he's going to do his best to sell these snowblowers for the other people and the other people the owners of the snow blowers are called the consign ores now Fred never owns the consigned snowblowers but provides a service to the consigners that service is selling the snowblowers sometimes Fred repairs and advertises the consigned snowblowers as part of the sale and Fred receives a 30 percent commission on the sales price and is reimbursed for expenses so Fred is going to receive a 30 percent commission on the gross sales price in addition to that fred is going to be reimbursed for repairs and and advertising to get these snowblowers sold the number of snowblower received on consignment while fred has received five snowblowers to date consignment snowblower repairing fred has spent a total of five hundred dollars repairing these snowblowers and advertising them the total amount of consignments nobler sales is four thousand dollars for this year fred sold those five snowblowers and received about $800 each form for a grand total of four thousand dollars so let's go down to the journal entries the journal entries are very straightforward there's only four journal entries and the first journal entry is the easiest of them all journal entry number one acceptance of consigned snowblowers well there's no entry and the reason for that is Fred does not own those snowblowers he did not buy those snowblowers so there is no entry fred is not obligated to the snowblower owners entry number two receivable from consigners if you recall fred spent five hundred dollars repairing and advertising those consigned snowblowers he spent five hundred dollars cash that's why we're...