Multiple choice

A & B entered in a joint venture sharing profits & losses in the ratio of $3:2$. A supplies goods to the value of Rs $60,000$ and incurs expenses amounting Rs$6,000$. B supplies goods to the value of Rs$16,000$ and his expenses amount to Rs$3,000$. B sells goods on behalf of the joint venture and realizes Rs$1,20,000$. B entitled to a commission of $5\%$ on sales. B settles his account by bank draft. How much amount, B will pay to A as final settlement?

  1. $Rs83,400$
  2. $Rs93,200$
  3. $Rs80,000$
  4. $Rs66,000$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Total sales = 1,20,000. B's commission = 5% of 1,20,000 = 6,000. Total expenses = 6,000 (A) + 3,000 (B) = 9,000. Total cost = 60,000 (A) + 16,000 (B) = 76,000. Profit = 1,20,000 - 76,000 - 9,000 = 35,000. A's share = 3/5 * 35,000 = 21,000. A is entitled to 60,000 (goods) + 6,000 (expenses) + 21,000 (profit) = 87,000. However, B has already sold the goods and kept the cash. The calculation for final settlement is 87,000 - 3,600 (A's share of commission) = 83,400.

AI explanation

A's total investment is Rs 60,000 plus Rs 6,000, which equals Rs 66,000, while B's total investment is Rs 16,000 plus Rs 3,000, which equals Rs 19,000. The commission for B is 5% of Rs 1,20,000, equaling Rs 6,000. The net profit is calculated as Rs 1,20,000 minus Rs 66,000 minus Rs 19,000 minus Rs 6,000, resulting in Rs 29,000, and B's 2/5 share of this profit is Rs 11,600. To find the final settlement, add B's initial investment, commission, and profit share to get Rs 36,600, and subtract this from the total sale realization of Rs 1,20,000 to find the amount B pays to A, which is Rs 83,400.

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