A and B enter into a joint venture sharing profit and losses in the ratio of 3:2. A purchased goods costing `2,00,000. B sold 95% goods for ` 2,50,000. A is entitled to get 1% commission on purchase and B is entitled to get 5% commission on sales. A drew a bill on B for an amount equivalent to 80% of original cost of goods. A got it discounted at `1,50,000. What is A's share of profit?

Question

Quizplus · Accepted Answer

A's commission on purchase = 1% of 2,00,000 = `2,000.B's commission on sales = 5% of 2,50,000 = `12,500.Total profit = Sales - Cost of goods sold - A's commission - B's commission= 2,50,000 - (95% of 2,00,000) - 2,000 - 12,500= 2,50,000 - 1,90,000 - 2,000 - 12,500= `45,500.A's share = 3/5 of 45,500 = `27,300.But A also incurred a loss due to discounting the bill = 1,60,000 (80% of 2,00,000) - 1,50,000 = `10,000.Therefore, A's net share of profit = 27,300 - 10,000 = `17,300.Since none of the options match the calculated value, the correct answer is:D

A and B Enter into a Joint Venture Sharing Profit