Question

A & B entered into a joint venture to purchase and sell crackers. Profits or losses were to be shared equally. A purchased cracker worth Rs.1,00,000 and incurred the following expenses in sending it to B: Forwarding charges Rs.6,000, Insurance charges Rs.5,000 and Rental Charges Rs.4,000. The whole crackers were disposed of by B for Rs.2,20,000. B incurred advertisement expenses Rs.20,000. Considering the given data; which of the following statement is correct?

• A. A will remit Rs.65,000 to B
• B. B will remit Rs.65,000 to A
• C. A will remit Rs.1,57,500 to B
• D. B will remit Rs.1,57,500 to A

Answer 1

The correct option is D B will remit Rs.1,57,500 to A

Amount remitted by B to A is :

Purchase price Rs. 100000 + Profit of A Rs. 42500 + Forwarding charges Rs. 6000 + Insurance charges Rs. 5000 + Rental charges Rs. 4000.