CMA Foundation · Fundamentals of Financial and Cost Accounting · Joint Venture
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 goods costing Rs 60,000 for Rs 90,000. Unsold stock of goods costing Rs 20,000 remains with Nisha and is taken over by her at Rs 22,000. Nisha's selling expenses were Rs 2,000. What is Meena's share of profit?
Meena's share is Rs 13,000. The venture's credits are sales of Rs 90,000 plus stock taken over at Rs 22,000, totalling Rs 1,12,000, against costs of Rs 86,000. Profit is Rs 26,000, shared equally, giving Rs 13,000 each.
- ARs 12,000
- BRs 14,000
- CRs 13,000Correct
- DRs 11,000
Explanation
Credits: sales 90,000 + stock taken over 22,000 = 1,12,000. Debits: purchases 80,000 + freight 4,000 + expenses 2,000 = 86,000. Profit = 26,000, so Meena's half is 13,000. Using cost Rs 20,000 for the stock gives 12,000, which is wrong because the stock was taken at Rs 22,000.
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