Consignment Sale In 2020, the Following Transaction Occurred Between Senators Wholesale Corp

question 38

Essay

Consignment sale
In 2020, the following transaction occurred between Senators Wholesale Corp. (consignor) and Canadiens Stores (consignee):
On March 2, 2020 Senators shipped merchandise costing $ 52,000 to Canadiens. Senators paid $ 4,000 for freight and Canadiens paid $ 3,000 for advertising (to be reimbursed by Senators). By the end of the third quarter of 2020 (September 30, 2020), Canadiens advised Senators that all the merchandise has been sold for $ 70,000, and forwarded the proceeds (net of a 15% commission and the outlay for advertising) to Senators.
Instructions
a) Prepare all entries for Canadiens to account for this transaction.
b) Prepare all entries for Senators to account for this transaction.

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Definitions:

Expected Income

The amount of money one anticipates earning over a specific period, considering various factors like salary, investments, and other income sources.

Probability

An indicator of the probability that a particular event will happen, denoted as a value ranging from 0 to 1.

Certain Income

refers to money or revenue that is guaranteed or highly likely to be received, with minimal risk of variation or loss.

Fair Insurance Policy

Describes an insurance contract that provide coverage at reasonable, transparent, and equitable terms for both parties.