Question

X & Y entered a joint venture for export of Indian Handicraft items to overseas customers. X sends goods worth Rs. 2,00,000 to Y for export to USA. Y exported goods worth Rs. 1,75,000 to USA for Rs.2,10,000 and agreed to take away the remaining goods at cost less 10%. Find the profit on Joint Venture.

• A. 36,000
• B. 32,500
• C. 30,000
• D. 25,000

Answer 1

The correct option is B 32,500

Goods worth Rs. 1,75,000 have been sold for Rs. 2,10,000. Therefore, profit on sale is (2,10,000 -1,75,000) = Rs. 35,000. Remaining goods worth Rs. 25,000 have been taken over by Y at 10% below cost. Therefore, there is a loss of ( 25,000 x 10%) = Rs. 2,500. Hence, profit on Joint Venture will be (35,000 - 2,500) = Rs. 32,500