CMA Intermediate · Financial Accounting · Joint Venture
Anil and Bharat run a joint venture sharing profits 3:2. Anil purchased goods worth Rs 80,000 and paid expenses Rs 5,000. Bharat sold all goods for Rs 1,10,000 and incurred expenses of Rs 3,000. Neither is charged commission. What is the profit of the venture and Anil's share?
Total venture costs are Rs 88,000 (purchases 80,000 plus expenses 8,000) against sales of Rs 1,10,000, giving a profit of Rs 22,000. Anil's 3/5 share is Rs 13,200.
- AProfit Rs 22,000; Anil's share Rs 13,200Correct
- BProfit Rs 30,000; Anil's share Rs 18,000
- CProfit Rs 22,000; Anil's share Rs 8,800
- DProfit Rs 25,000; Anil's share Rs 15,000
Explanation
Total expenses = 80,000 + 5,000 + 3,000 = 88,000. Profit = 1,10,000 - 88,000 = 22,000. Anil's share = 3/5 x 22,000 = 13,200. Rs 8,800 reverses the ratio; Rs 30,000 ignores expenses of both, and Rs 25,000 ignores Bharat's expenses.
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