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Question

Ram & Mohan entered into a joint venture to purchase and sell new year gifts. They agreed to share profits and losses equally. Ram purchased goods worth Rs.1,00,000 and spent Rs.6,000 in sending the good to Mohan. He also paid Rs.2,000 for insurance. Ram drew a bill of exchange upon Mohan for Rs.1,00,000 at 2 months. He got the bill discounted @ 18% p.a. Mohan spent Rs.3,000 on cartage, Rs.5,000 as rent and Rs.5,000 on advertisement. He sold all the gifts for Rs.2,00,000 after retaining gifts worth Rs.2,000 for his personal use. What will be the profit on joint venture?

A
Rs.78,000
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B
Rs.80,000
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C
Rs.81,000
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D
Rs.76,000
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Solution

The correct option is A Rs.78,000
Joint Venture Account
ParticularsRs Particulars Rs
To Ram purchased 100000 By Sales 200000
To Spent to Mohan 6000 By Goods taken over 2000
To Insurance 2000
To Discount on Bill 3000
To Cartage 3000
To Rent 5000
To Advertisement 5000
To Profit on Venture 78000
Ram-39000(1/2)
Mohan-39000(1/2)
Total 202000 Total 202000

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