Reference no: EM133042559

Questions -

Q1. Integrity, Inc. consigned 1,000 units of the ordinary printer, costing P700 each to Honesty to be sold at P1,200 per unit. The agreement calls for a 20% commission on units sold and any expenses paid by the consignee are reimbursable by the consignor. Integrity, Inc. paid P30,000 freight and insurance of P10,000 for the shipment. At the end of the month, Honesty remitted the amount due to the consignor after deducting a commission of P204,000 and advertising costs of P35,000. The record shows that 120 units were left to the consignee and some units were returned to the consignor. Honesty paid the cost of shipment of the returned units amounting to P15,000. What is the proper amount of net income reported by the consignor?

Q2. On January 2, 2021, Integrity Co. sold merchandise to Honesty, Inc. for P2,500,000. The cost of items to Integrity was P2,000,000. Honesty gave Integrity P500,000 cash and P2,000,000 note payable in 4 annual installments of P500,000 plus 12% interest. Honesty made the 1st principal and interest payment on December 31, 2021. Expenses related to the installment sale are P100,000. How much is the net income related to the sale on installment in 2021?