Question

.
A and B enter in to joint venture sharing profit and loss in the ratio 1:1 A purchased goods costing 20,000.
B sold the goods for 25,000. A is entitled to get 1% commission on purchase and B is entitled to get 5%
commission on sales the profit will be
(a) 3,550 (b) 3,600
(c) 3,400 (d) 3,800​

Answer 1

Explanation:

Cost of goods purchased by A = Rs. 2,00,000

Sale value of goods sold by B = Rs. 2,50,000

Profit on sale = Sale value  - Cost price = Rs. 2,50,000 - Rs. 2,00,000 = Rs. 50,000

Commission to A = 1% on purchase = Rs. 2,00,000 x 1% = Rs. 2,000

Commison to B = 5% on sale = Rs. 2,50,000 x 5% = Rs. 12,500

Total commission payable = Rs. 2,000 + Rs. 12,500 = Rs. 14,500

Thus, Profit on venture = Total profit - Total commission payable = Rs. 50,000 - Rs 15,500 = Rs. 35,500.