Multiple choice

A and B enter into a joint venture sharing profit and losses in the ratio 3:2. A purchased goods costing 2,00,000. B sold 95% goods for 2,50,000. A is entitled to get 1% commission on purchase and B entitled to get 5% commission on sales, Remaining goods are stolen. A is entitled to get interest on Capital @ 5% irrespective of utilization period. What will be the final remittance?

  1. b will remit 2,15,300 to A.

  2. B will remit 2,27,300 to A.

  3. B will remit 2,06,200 to A.

  4. By will remit 2,18,700 to A.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A's investment is 2,00,000. Commission for A: 1% of 2,00,000 = 2,000. Interest on capital for A: 5% of 2,00,000 = 10,000. Sales by B: 2,50,000. Commission for B: 5% of 2,50,000 = 12,500. Profit = Sales - Cost - Commissions - Interest = 2,50,000 - 2,00,000 - 2,000 - 12,500 - 10,000 = 25,500. Profit share (3:2): A gets 15,300, B gets 10,200. Total due to A = Capital + Commission + Interest + Profit share = 2,00,000 + 2,000 + 10,000 + 15,300 = 2,27,300.

AI explanation

The net profit is calculated as sales of 2,50,000 minus the cost of goods sold of 1,90,000, minus A's purchase commission of 2,000, and minus B's sales commission of 12,500, leaving a profit of 45,500. Adding the stolen goods valued at 10,000, A's 5% interest on capital of 10,000, and A's 3/5 profit share of 27,300 brings A's total entitlement to 47,300. Since A already spent 2,00,000 on purchases but received a discounted bill of 1,50,000, B must remit 2,00,000 plus 47,300 minus 1,50,000, equaling 2,27,300 to A.

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