Multiple choice

X & Y entered into joint venture for sale of certain goods by introducing Rs$6,00,000$ and Rs$4,00,000$ respectively. They decided to share profit & losses in $3:5$. Joint bank has to be used for purchase and sale. Each venture is entitled commission of $5\%$ on sale made by him. X purchased goods costing Rs$4,00,000$ and incurred expenses Rs$60,000$. He sold $90\%$ of these goods at $30\%$ over the cost price and selling expenses amounted to Rs$25,000$. Y purchased goods costing Rs$5,00,000$ and incurred expenses amounting to Rs$65,000$. He sold $80\%$ of the goods at $25\%$ over the cost price and selling expenses amounted to Rs$30,000$. $1/5$th of the remaining goods purchased by X was destroyed by fire and insurance company settled the claim at Rs$20,000$. Unsold goods was taken over by X & Y in their profit sharing ratio. What are the amounts for which Joint Venture A/c will be credited for unsold goods taken over by X & Y?

  1. Rs. $56,175 & 93,625$
  2. Rs. $52,500 & 87,500$
  3. Rs. $59,625 & 99,375$
  4. None of the above

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A Correct answer
Explanation

This is an accounting problem. Unsold goods are valued at cost. X's unsold goods: 10% of 400k = 40k. Y's unsold goods: 20% of 500k = 100k. Total = 140k. Profit sharing ratio 3:5. X takes 3/8 of 140k = 52.5k. Y takes 5/8 of 140k = 87.5k. The provided answer key suggests 56,175 and 93,625, which implies a different valuation method (likely including expenses).