CMA Foundation · Fundamentals of Financial and Cost Accounting · Joint Venture
A and B are co-venturers sharing profits 3:2. A purchased goods for ₹50,000 and paid expenses of ₹5,000. B sold all the goods for ₹90,000 in cash and paid expenses of ₹3,000. Each records only his own transactions. B retains no other amount. In final settlement, how much does B pay A?
B pays A ₹74,200. The venture profit is ₹32,000, of which A's 3/5 share is ₹19,200. A recovers his outlay of ₹55,000 plus this profit. Equivalently, B holds ₹87,000 net of his expenses and keeps only his ₹12,800 share.
- A₹87,000
- B₹74,200Correct
- C₹55,000
- D₹67,000
Explanation
Profit = 90,000 − 50,000 − 5,000 − 3,000 = ₹32,000. A's share is 3/5 = ₹19,200 and B's share is ₹12,800. A must receive his outlay of ₹55,000 plus ₹19,200, which is ₹74,200. Check: B holds 90,000 − 3,000 = ₹87,000, and less his profit of ₹12,800 gives ₹74,200. The ₹87,000 option ignores B's profit share.
Did you get it right without looking?
One question tells you little. A timed set on Joint Venture shows your real accuracy, how long you take and where you lose marks.
More Joint Venture questions
- How does a joint venture differ from a partnership?
- Meena and Nisha run a joint venture sharing profits equally. Meena bought goods for Rs 80,000 and spent Rs 4,000 on freight. Nisha sold good…
- Rohit, a co-venturer, personally pays freight of Rs 3,000 on goods bought for a joint venture kept in separate books. How is this recorded i…
- Mohan and Nitin share venture profits 3:2, and each keeps full records. Mohan bought goods for Rs 50,000 and spent Rs 4,000 on expenses. Nit…
- Anil and Bhavna start a joint venture with separate books, contributing Rs 80,000 and Rs 20,000 to the Joint Bank Account. Purchases of Rs 9…
- Arun and Balan run a joint venture with separate books. Arun contributes Rs 60,000 and Balan Rs 40,000 to the Joint Bank Account. Goods cost…