CMA Foundation · Fundamentals of Financial and Cost Accounting · Joint Venture
Anil and Bharat run a joint venture sharing profits and losses in the ratio 3:2. Anil buys goods for Rs 50,000. Bharat pays expenses of Rs 10,000 and sells all the goods for Rs 80,000 in cash. What is Anil's share of profit?
Anil's share of profit is Rs 12,000. Total profit is sales of Rs 80,000 less goods of Rs 50,000 and expenses of Rs 10,000, which is Rs 20,000. Anil gets 3/5 of this under the 3:2 sharing ratio.
- ARs 12,000Correct
- BRs 8,000
- CRs 10,000
- DRs 20,000
Explanation
Profit = 80,000 - 50,000 - 10,000 = Rs 20,000. Anil's share is 3/5 of 20,000 = Rs 12,000. Rs 8,000 is Bharat's share, so choosing it swaps the ratio.
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