Multiple choice

A and B enter into a joint venture sharing profit and losses equally. A purchased 10,000 kg of rice @ 50 per kg. B purchased 2000 kg of wheat @ 60 per kg. A sold 2000 kg of wheat @ 70 per kg and B sold 10,000 kg of rice @ 60 per kg. The profit on venture when same sets of books is maintained will be ____________.

  1. 2,20,000.

  2. 2,00,000.

  3. 2,40,000.

  4. 1,20,000.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A's cost: 10,000 * 50 = 500,000. B's cost: 2,000 * 60 = 120,000. Total cost = 620,000. A's sales: 2,000 * 70 = 140,000. B's sales: 10,000 * 60 = 600,000. Total sales = 740,000. Profit = 740,000 - 620,000 = 120,000.

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