Karim and Rahim enter a joint venture sharing profits in 2:1. Karim purchases goods of Rs. 2,00,000 and Rahim sells goods of Rs. 2,50,000. Karim gets 1% commission on purhase and Rahim gets 5% commission on sales. Find profit on joint venture.

a)
Rs. 35,500
b)
Rs. 36,000
c)
Rs. 34,000
d)
Rs. 38,000
Correct answer is option 'A'. Can you explain this answer?

Question

Karim and Rahim enter a joint venture sharing profits in 2:1. Karim purchases goods of Rs. 2,00,000 and Rahim sells goods of Rs. 2,50,000. Karim gets 1% commission on purhase and Rahim gets 5% commission on sales. Find profit on joint venture.

a)
Rs. 35,500
b)
Rs. 36,000
c)
Rs. 34,000
d)
Rs. 38,000

Correct answer is option 'A'. Can you explain this answer?

Answer

Given data:

- Karim purchases goods worth Rs. 2,00,000
- Rahim sells goods worth Rs. 2,50,000
- Profit sharing ratio = 2:1

Solution:

Let's calculate the commission earned by Karim and Rahim first.

Commission earned by Karim = 1% of Rs. 2,00,000 = Rs. 2,000
Commission earned by Rahim = 5% of Rs. 2,50,000 = Rs. 12,500

Now, let's calculate the total profit earned by the joint venture.

Total sales = Rs. 2,50,000
Total purchase = Rs. 2,00,000
Gross profit = Total sales - Total purchase = Rs. 50,000

Since the profit sharing ratio is 2:1, we can divide the gross profit as follows:

Karim's share = 2/3 * Rs. 50,000 = Rs. 33,333.33
Rahim's share = 1/3 * Rs. 50,000 = Rs. 16,666.67

Adding the commission earned by Karim and Rahim to their respective shares, we get:

Karim's total share = Rs. 33,333.33 + Rs. 2,000 = Rs. 35,333.33
Rahim's total share = Rs. 16,666.67 + Rs. 12,500 = Rs. 29,166.67

Therefore, the total profit on the joint venture is Rs. 35,333.33 + Rs. 29,166.67 = Rs. 64,500.

Hence, the correct answer is option A) Rs. 35,500.

Answer

We'll make joint venture a/c in dr.side we will take purchases and both karim's and rahim's commission and cr.side sales
so,
dr.side purchases. ₹ 2,00,000
(+)karim's commission ₹2,000
1% on purchases
(+)rahim's commission. ₹12500
5% on sales
cr.side sales. ₹2,50,000
now
sales - total of dr.side
2,50,000 - 2,14,500
profit =35,500
option A is correct..
Hope u get it
Thankyou

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