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593. An Agent is a person who transacts business for another; as, the purchase or sale of merchandise or real estate, collecting or investing money, etc.
594. An agent who receives goods to be sold is sometimes called a factor or commission merchant; one employed to buy or sell stocks or bonds, or to negotiate money securities, is called a broker.
595. Commission is an allowance made to agents or commission merchants for transacting business. It is usually a percentage of the money involved in the transaction, although sometimes it is computed at a certain price per bale, bushel, barrel, etc.
596. The Agent's Commission for selling is computed on the gross proceeds, and for purchasing on the prime cost.
597. The Principal is the person for whom the business is transacted.
598. A Consignment is a shipment of goods from one party to another, be sold on account of the shipper, or on joint account of the shipper and the consignee. The shipper is called the Consignor, and the one to whom the goods are shipped is called the Consignee.
599. Guaranty is a per cent. charged by an agent for assuming the risk of loss from sales made by him on credit, or for giving a pledge of the grade of goods bought; it is computed the same as are commission charges.
600. The Gross Proceeds of a sale or collection is the total amount received by the agent before deducting commission or other charges.
601. The Net Proceeds is what remains after all charges have been deducted.
REMARKS.—Charges may be for commission, guaranty, freight, inspection, cartage, storage, or any other outlay incident to the sale.
602. An Account Sales is a statement in detail rendered by a Consignee to his Consignor, showing the sales of the consignment, all of the charges or expenses attending the same, and the net proceeds.
603. An Account Purchase is a detailed statement made by a purchasing agent to his principal, having the quantity, grade and price of goods bought on his account, all the expenses incident to the purchase, and the gross amount of the purchase.
604. Commission compares with Abstract Percentage, as follows:
The Commission for either buying or selling, or for guaranty of quality or credit = Percentage.
The remittance to Purchasing Agent, including both Commission and Investment = Amount.
The Selling Price, minus the Commission = Difference.
605.-To find the Commission, the Cost or Selling Price and Per Cent. of Commission being given.
EXAMPLE.—How much commission will be due an agent who buys $8000 worth of coal, on a commission of 5%? OPERATION.
EXPLANATION.-Since the rate of commission $8000 = investment or base.
is 5 per cent., the whole commission due the agent .05 = per cent. of commission. will be 5 per cent. of the investment, $8000, or $400 = commission or percentage.
$400. REMARK.— In case of sales, proceed in like manner, treating the selling price as the base.
Rule.-Multiply the cost or selling price by the rate per cent. of commission. Formula.—Commission = Cost or Selling Price x Rate per cent. of Commission.
EXAMPLES FOR PRACTICE.
606. 1. An agent sold a house and lot for $6000, and charged 3% for his services. How much was the commission?
2. Having agreed to pay an agent 3% for all purchases made by him, how much will be due him, if he buys for me goods costing $2500?
3. If an agent's charges are 2%, how much commission will he earn by selling property valued at $12500?
4. I owned one-half of a stock of goods sold by an agent for $10000. If the agent charged 5% for selling, how much commission must I pay?
5. An auctioneer sold a store for $8500, and its contents for $7350. How much did his fees amount to, at 14%?
6. A real estate agent sold a farm or 91 acres, at $120 per acre, on a commission of 2%; and the stock and utensils on the farm for $3150, on a commission of 5%.
What was the amount of his commission?
607. To find the Investment or Gross Sales, the Commission and Per Cent. of Commission being given.
EXAMPLE.—If an agent's rate of commission is 2%, what value of goods must he sell to earn a commission of $50? OPERATION.
EXPLANATION.-Since the agent's commission is 2 per Com.
cent., he earns 2 cents by selling $1 worth of goods; the 2%=.02 ) $50.00
value of the goods sold, therefore, must be as many
times $1 as 2 cents is contained times in $50; 2 cents is sales.
contained in $50, 2500 times, and 2500 times $1 is $2500. REMARK.—When commission for purchase is given and cost required, proceed in like
Rule.- Divide the commission by the rate per cent. of commission.
Formula.—Prime Cost or Gross Selling Price = Commission, divided by the Rate Per Cent. of Commission.
EXAMPLES FOR PRACTICE.
608. 1. What amount of merchandise must be purchased on a commission of 3%, in order that an agent may receive a commission of $175?
An agent received $306.25 for selling wheat, on a commission of 14%. What was the amount of the sales?
A collector's charges of 5% for collecting a note amounted to $14.10. What sum was collected?
4. A factor charged $216.80 for selling a consignment of canned fruit. If his commission was 2%, what must have been the gross sales?
5. I paid a grain dealer 11% for buying corn for me, at 624 per bushel. If his commission amounted to $83.70, how many bushels did he buy?
6. A Mobile factor earned $99.75 by selling cotton, at 23% commission. How many bales, averaging 560 lb., did he sell, the price being 15€ per pound ?
609. To find the Investment and Commission, when Both are Included in a Remittance by the Principal.
EXAMPLE.- If $1050 is sent to a Saginaw agent for the purchase of salt, how much will he invest, his rate of commission being 5%? OPERATION.
EXPLANATION.–For each dollar invested $1.00 = investment.
by the agent, the principal supplies the dollar .05 commission.
invested and 5 cents for the agent's services; $1.05 = actual cost to principal of each dollars in salt as $1 plus 5 cents, or $1.05, is
therefore the agent will invest only as many dollar invested by agent. contained times in the remittance, $1050; 1.05 1.05 ) $1050.00
is contained in $1050, 1000 times; hence the $1000 sum invested in salt.
investment is $1000.
Rule.- Divide the remittance by 1 plus the rate per cent. of commission.
REMARKS.—1. All computations in commission may be made by applying the principles of Percentage.
2. When a charge is made for guaranty, add the per cent. of guaranty to 1 plus the rate per cent. of commission, and proceed as above.
Formula.--Investment = Remittance to Agent • 1 plus the Rate Per Cent. of Commission.
EXAMPLES FOR PRACTICE, 610. 1. An agent receives $12504.20, with instructions to invest in wool. If his commission is 3%, how many dollars worth of wool will he purchase?
How many pounds of wool, at 274 per pound, can be bought for $8424, if the agent is allowed 4% for purchasing?
3. I remitted $1306.45 to a Boston agent for the purchase of soft hats. If the agent's commission is 4%, and he makes an added charge of 2% for guaranty of quality, how many dozen hats, at $8.50 per dozen, should he send me?
4. An agent receives $13760.80 to invest in land, after deducting his charges of 3%. What amount of commission will he receive?
5. A real estate agent, whose stated commission is 21%, receives $8302.50 to invest in Iowa prairie, at $5.40 per acre. How many acres did he purchase, and and how much was his commission.
6. I remitted $300 to an agent for the purchase of hops. If the agent's charges were 5% for purchase and $6 for inspection, how many pounds, at 10° per pound, ought he to buy?
MISCELLANEOUS EXAMPLES. 611. 1. A collector obtained 75% of the amount of an account, and after deducting 12% for fees, remitted his principal $495. What was the amount of his commission?
2. A Hartford fruit dealer sent a Lockport agent $1946. 70, and instructed him to buy apples at $1.40 per barrel. The agent charged 3% for buying, and shipped the purchase to his principal in six car loads of an equal number of barrels. How many barrels did each car contain?
3. Find the per cent. of commission on a purchase, if the gross cost is $2048.51, the commission $87.30, the cartage $20, and other charges $1.21.
4. 11500 bushels of wheat were bought through an agent, who charged 3% for buying. If the agent paid 854 per bushel for the wheat, $762.50 freight, and $12.50 insurance, what sum should be remitted to him in full settlement?
5. A collector obtained 75% of a doubtful account amounting to $1750. How much was his per cent. of commission, if, by agreement with the principal, the commission was to be 50% of the net proceeds remitted?
6. A farmer received from his city agent $490 as the net proceeds of a shipment of butter. If the agent's commission is 3%, delivery charges $6.80, and 5% charge is made for guaranty of quality to purchasers, how many pounds, at 27¢ per pound, must have been sold, and how much commission was allowed?
7. An agent sold 2000 bu. Alsike clover seed, at $7.85 per bushel, on a commission of 5%; and 1200 bu. medium red, at $5.20 per bushel, on a comunission of 21%; taking the purchaser's 3 month's note for the amount of the sales. If the agent charges 4% for his guaranty of the notes, what amount does he earn by the transaction?
8. An agent bought butter on a commission of 10%, cheese on a commission of 6%, and eggs on a commission of 5%. If his commission for buying the butter was $21, for buying the cheese $21.60, and for buying the eggs $22, and he charges 25% additional for guaranteeing the freshness of the eggs, what sum should the principal remit to pay for purchases and charges?
9. Find the net proceeds of a sale made by an agent charging 31%, if incidental charges and commission charges were each $41.30.
10. From a consignment of 3160 pounds of tea, sold by an agent at 30¢ per pound, the consignor received as net proceeds $853.74. What was the per cent. . of commission charged for selling, if the charges for storage and insurance amounted to $51.60?
11. Find the gross proceeds of a sale made by an agent charging 21% for commission, 5% for guaranty, $17.65 for cartage, $11.40 for storage, and $3.25 for insurance, if the net proceeds remitted amount to $1714.10.
12. A Milwaukee agent received $83195.28, with instructions to invest onehalf of it in wheat, at 80¢ per bushel, and the balance, less all commissions, in wool, at 20¢ per pound. If his commission for buying the wheat is 2%, and that for buying the wool is 5%, how many pounds of wool will he buy, and what will be the amount of his commissions?
13. I sent $3402.77 to my Atlanta agent for the purchase of sweet potatoes, at $1.60 per barrel; his charges were, for commission, 25%; guaranty, 3%; drayage, 14 per barrel; and freight, $200. How many barrels did he buy, and how much unexpended money was left in his hands to my credit?
14. A Texas buyer shipped 33000 lb. of coarse wool to a Boston agent to be sold on commission, and gave instructions for the net proceeds to be invested in leather. If the agent sold the wool at 18¢ per pound, on a commission of 2%, and charged 10% for the purchase and guaranty of grade of the leather, what was the amount of his commissions?
15. I received from Duluth a cargo of 16000 bu. of wheat, which I sold at $1.10 per bushel, on a commission of 4%; by the consignor's instructions I invested the net proceeds in a hardware stock, for which I charged 5% commission. What was the total commission, and how much was invested in hardware?
16. Having sent a New Orleans agent $1835.46 to be invested in sugar, after allowing 3% on the investment for his commission, I received 32400 pounds of sugar. What price per pound did it cost the agent?
17. An agent in Providence received $828 to invest in prints, after deducting his commission of 3%. If he paid 74 per yard for the prints, how many yards did he buy?
18. The fees of the general agent of an insurance company are 5% on all sums received, and 5% additional on all sums remaining in his hands at the end of the year, after all losses and the expenses of his office are paid. He receives during the year $117416.25, paid losses to the amount of $91140.50, and the expenses of his office were $3267.70. Find his total fees.
19. An agent sold on commission 81 self-binders, at $140 each, and 113 mowers, at $65 each, remitting $10224.90 to his principal. Find the rate of commission.
20. A commission merchant received a consignment of 660 bales of cotton, of an average weight of 510 pounds, which he sold at 1244 per pound, on a commission of 3%, charging 106 per bale for cartage. He invested for the consignor $9416.20 in bacon, charging 5% for buying, and remitted cash to balance consignor's account. How much was the cash remittance?
21. An agent received $4325, to invest in mess-pork, at $16 per barrel, after deducting his purchasing commission of 4%. If the charges for incidentals were $81.40, besides cartage of 754 per load of 8 barrels, how many barrels did he buy, and what unexpended balance does he place to the credit of his principal?