Question

Anuska and Avani entered into joint venture contributing Rs.5,00,000 each into joint bank account to share profit and loss equally. It was agreed to pay commission @8% on the sale made by the each of them.
They purchased goods for Rs.8,00,000 and Anushka sold 60% of the same for Rs.5,20,000. Rs.25,700 was spent on loading and unloading. 30% of goods were sold by Avani for Rs.3,00,000. Closing stock was taken by the ventures in the ratio of 3:2 at cost price of purchased amount of goods and the venture's A/c settled from joint bank A/c.
Profit on joint venture is =?

• A. Rs.8,700
• B. Rs.40,700
• C. Rs.32,700
• D. Rs.11,700

Answer 1

The correct option is A Rs.8,700

Goods sold by Anushka $=$ $5,20,000$

Goods sold by Avani $=$ $3,00,000$

Anushka's commission $=$ Sales made by Anushka $\times$ $\frac{8}{100}$

$=$ $5,20,000$ $\times$ $\frac{8}{100}$

$=$ $41,600$

Avani's commission $=$ Sales made by Avani $\times$ $\frac{8}{100}$

$=$ $3,00,000$ $\times$ $\frac{8}{100}$

$=$ $24,000$

Profit $=$ (Revenue $-$ Expenses)

$=$ (Closing stock $+$ Goods sold by Anushka $+$ Goods sold by Avani) $-$ (Goods purchased $+$ Loading Unloading expense $+$ Anushka's commission $+$ Avani's commission)

$=$ $(80,000+5,20,000+3,00,000)$ $-$ $(8,00,000+25,700+41,600+24,000)$

$=$ $9,00,000-8,91,300)$

$=$ $8,700$.