Multiple choice

A and B were partners in a joint venture sharing profits and losses in the ratio of 4:1. A supplies goods to the value ofRs. 55,000 and incurs expenses amounting to Rs. 400. B supplies goods to the value of Rs. 14,000 and his expenses amount to Rs. 300. B sells goods on behalf of the joint venture and realizes Rs. 92,000. B is entitled to a commission of 5 per cent on sales. B settles his account by bank draft. What will be the final remittance ?

  1. B will remit Rs. 69,560 to A

  2. A will remit Rs. 69,560 to B

  3. A will remit Rs. 69,000 to B

  4. B will remit Rs. 69,000 to A
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Total expenses = 400 + 300 = 700. Total goods = 55000 + 14000 = 69000. Total cost = 69700. Sales = 92000. Commission = 5% of 92000 = 4600. Net profit = 92000 - 69700 - 4600 = 17700. Profit share: A = 17700 * 4/5 = 14160, B = 17700 * 1/5 = 3540. B receives 14000 (goods) + 300 (expenses) + 4600 (commission) + 3540 (profit) = 22440. B collected 92000. Remittance = 92000 - 22440 = 69560.

AI explanation

Calculate the net profit by deducting the total Venture Capital of Rs. 69,700 and B's commission of Rs. 4,600 from the sales realization of Rs. 92,000, which leaves a net profit of Rs. 17,700. Split this profit in the 4:1 ratio to find A's total profit of Rs. 14,160, and combine it with A's initial capital and expenses of Rs. 55,400 to find A's total entitlement of Rs. 69,560. Because B holds the entire realization of Rs. 92,000 but is only entitled to Rs. 22,440 for his own capital, expenses, and profit share, B settles the account by remitting Rs. 69,560 to A.

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