CMA Foundation · Fundamentals of Financial and Cost Accounting · Joint Venture
In a joint venture kept in separate books, Rohan and Sameer share profits 3:2. Sales were Rs 2,50,000, purchases Rs 1,60,000, and expenses Rs 20,000. Rohan's share of the profit credited to his account is:
Rohan's share is Rs 42,000. Venture profit is sales of Rs 2,50,000 less purchases of Rs 1,60,000 and expenses of Rs 20,000, giving Rs 70,000, which is divided 3:2, so Rohan receives three-fifths of it.
- ARs 42,000Correct
- BRs 28,000
- CRs 48,000
- DRs 70,000
Explanation
Profit = 2,50,000 - 1,60,000 - 20,000 = 70,000. Rohan's share is 3/5 x 70,000 = 42,000. Rs 28,000 is Sameer's share, from using the ratio the wrong way round.
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