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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Business

Ainsley Drake

28 July, 22:33

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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Danielle · 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.