Question

M and N enter into joint venture where M supplies goods worth ₹6,000 and spend ₹100 on various expenses . M sells the entire lot for ₹7,500 meeting selling expenses amounted to ₹ 200. Profit Sharing ratio is equal. N remits M the amount due. the amount of remittance will be
a) 6,700
b) 7,300
c) 6,400
d) 6,100​

Answer 1

Answer:

6700 is the amount of remittance

Answer 2

Answer:

The amount of remittance will be 6,600.

Step by step explanation:

Cost of goods = Rs. 6,000

Sale price of goods = Rs. 7,500

Profit on sale of goods = Sale price - Cost price = Rs. 7,500 - Rs. 6,000 = Rs. 1,500

Profit sharing ratio = 1 : 1

Profit of M = Profit of N = Total profit x 1/2 = Rs. 1,500 x 1/2 =Rs. 750

Amount to be remitted by N to M = Proceeds from sale - expenses incurred (selling expenses) - N's share of profit = Rs. 7,500 - Rs. 200 - Rs. 750= Rs. 6,600.