A and B enter into a joint venture sharing profits and losses in the r...
Calculation of Profit and Loss:
- A and B's profit and loss sharing ratio is 3:2.
- Let the total cost of goods be x.
- A purchased goods worth Rs.200000, so B purchased goods worth (x-200000).
- Let the selling price of goods sold by B be y.
- B sold 95% of goods for Rs.250000, so the selling price of total goods is (y/0.95).
- A is entitled to get 1% commission on goods purchased, so A will get (0.01 * 200000) = Rs.2000 as commission.
- B is entitled to get 5% commission on sales, so B will get (0.05 * y) as commission.
- The remaining goods are stolen, so there is no revenue from them.
- The total profit or loss will be calculated as follows:
- Total revenue = (y/0.95)
- Total cost = x + (0.01 * 200000) + (0.05 * y)
- Total profit or loss = Total revenue - Total cost
Calculation of Final Remittance:
- Let the total profit or loss be z.
- A's share in profit or loss = (3/5)z
- B's share in profit or loss = (2/5)z
- B will remit the amount to A, so the final remittance will be:
- B's share in profit or loss - B's commission + A's commission = (2/5)z - (0.05 * y) + 2000
- Substituting the values of z, y, and A's and B's commission:
- Final remittance = (2/5)(Total revenue - Total cost) - (0.05 * 250000) + 2000
- Final remittance = (2/5)(y/0.95 - x - 0.05y) - 12500 + 2000
- Final remittance = (2/5)(0.95y - 1.05x) - 10500
After substituting the values of x and y, we get the final remittance as Rs.223300, which is option (b).
A and B enter into a joint venture sharing profits and losses in the r...
Purchase commission = 200000×1% = 2000. Sale commission = 250000 × 5% =12500. Profit = sale - CoGS =250000-200000-2000-12500 = 35500. A's profit ratio = 35500 × 3/5 = 21300. B will temit = 200000+2000+21300 = 223300 to A.
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