CMA Foundation · Fundamentals of Financial and Cost Accounting · Joint Venture
A and B share profits equally in a joint venture. A supplied goods costing ₹60,000 and paid expenses of ₹4,000. B sold all the goods for ₹1,00,000, paid selling expenses of ₹6,000 out of the sale proceeds, and holds the rest. What amount should B remit to A to settle the venture finally?
B should remit ₹79,000. A's entitlement is his outlay of ₹64,000 plus his half-share of the ₹30,000 profit, which is ₹15,000. B keeps his own ₹6,000 expenses and his ₹15,000 share of profit out of the ₹1,00,000 collected.
- A₹15,000
- B₹79,000Correct
- C₹85,000
- D₹94,000
Explanation
Total cost = 64,000 + 6,000 = ₹70,000, so profit = 30,000 and each share is ₹15,000. A is entitled to 64,000 + 15,000 = ₹79,000. B has received ₹1,00,000 in all, which is the money out of which he must pay A. ₹85,000 ignores B's expenses and ₹94,000 is B's net cash before paying A's share of profit.
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