Anny and Bunny enter into a joint venture sharing profit and losses in the ratio 1 : 1. Anny purchased goods costing Rs. 20,000. Bunny sold the goods for Rs. 25,000. Anny is entitled to get 1% commission on purchase and Bunny is entitled to get 5% commission on sales. The profit on venture will be

Sales = Rs. 25,000. Cost of goods = Rs. 20,000. Anny's commission on purchase = 1% of Rs. 20,000 = Rs. 200. Bunny's commission on sales = 5% of Rs. 25,000 = Rs. 1,250. Total commissions = Rs. 1,450. Profit = Rs. 25,000 - Rs. 20,000 - Rs. 1,450 = Rs. 3,550. Profit is shared equally, but the question asks for total profit on venture.