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?
Joint Venture Account | |||
Particulars | Rs | 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 |