1.
The parties to joint venture is called __________
Correct Answer
A. Co-venturers
Explanation
In a joint venture, the parties involved are referred to as co-venturers. This term signifies that they are collaborating and working together in a business venture. It implies a sense of equal partnership and shared responsibilities and risks. The term "co-venturers" accurately describes the relationship between the parties involved in a joint venture.
2.
A and V enter into a joint venture to sell a consignment of biscuits sharing profits and losses equally. A provides biscuits from stock Rs 10000. He pays expenses amounting to Rs 1000. V incurs further expenses on carriage Rs 1000. He receives cash for sales Rs 15000. He also takes over goods to the value of Rs 2000. The profit on joint venture is
Correct Answer
B. Rs.5000
Explanation
The profit on the joint venture is Rs.5000. This can be calculated by subtracting the total expenses (Rs.1000 + Rs.1000 = Rs.2000) from the total sales (Rs.15000) and adding the value of goods taken over by V (Rs.2000). Therefore, the profit is Rs.15000 - Rs.2000 - Rs.2000 = Rs.5000.
3.
A and B enter into a joint venture for purchase and sale of Type-writer. A purchased Typewriter costing Rs 100000. Repairing expenses Rs 10000, printing expenses Rs 10000. B sold it at 20% margin on selling _{ }price. The sales value will be:
Correct Answer
B. Rs. 150000
Explanation
A purchased the typewriter for Rs 100,000 and incurred additional expenses of Rs 10,000 for repairs and Rs 10,000 for printing. Therefore, the total cost of the typewriter for A is Rs 120,000. B sold the typewriter at a 20% margin on the selling price. This means that the selling price is 120% of the cost price. 120% of Rs 120,000 is Rs 144,000. Therefore, the sales value will be Rs 144,000.
4.
A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd make an equity issue of 100000 equity shares of Rs 10 each. 80% of the issue are subscribed by the party. The profit sharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio. How many shares^{ }to be purchased by A?
Correct Answer
C. 12000 shares
Explanation
A and B have subscribed to 80% of the equity issue, which means they have purchased 80,000 shares. The profit sharing ratio between A and B is 3:2, so out of the 80,000 shares, A will purchase 3/5 of the shares and B will purchase 2/5 of the shares.
To find out how many shares A will purchase, we need to calculate 3/5 of 80,000.
(3/5) * 80,000 = 48,000
Therefore, A will purchase 48,000 shares.
However, the question asks for the balance shares not subscribed by the public, which means we need to subtract the shares already purchased by A and B from the total number of shares.
100,000 - 80,000 = 20,000
So, A will need to purchase the remaining 20,000 shares.
Therefore, the correct answer is 20,000 shares.
5.
R and M entered into a joint venture to purchase and sell new year gifts. They agreed to share the profit and losses equally. R purchased goods worth Rs 1,00,000 and spent Rs 10,000in sending thegoods to M. He also paid Rs 5,000 for insurance. M spent Rs 10,000 as selling expenses and sold goods for Rs.2,00,000. Remaining goods were taken over by him at Rs 5,000. Find out profit on venture.
Correct Answer
C. Rs.80,000
Explanation
The profit on the venture can be calculated by subtracting the total expenses from the total revenue. R purchased goods worth Rs 1,00,000 and incurred additional expenses of Rs 10,000 for sending the goods to M and Rs 5,000 for insurance, totaling Rs 1,15,000. M incurred selling expenses of Rs 10,000. The total expenses incurred by R and M is Rs 1,25,000. M sold the goods for Rs 2,00,000 and took over the remaining goods at Rs 5,000. The total revenue generated is Rs 2,05,000. Subtracting the expenses from the revenue, the profit on the venture is Rs 80,000.
6.
A purchased goods costing 2,00,000, B sold 4/5th of the goods for Rs 2,50,000. Balance goods were taken over by B at cost less 20%. If a same set of books is maintained, find out profit on venture.
Correct Answer
A. Rs. 82000
Explanation
B purchased goods worth 2,00,000 and sold 4/5th of the goods for 2,50,000. This means that the total value of the goods sold is 4/5 * 2,00,000 = 1,60,000. The remaining goods were taken over by B at a cost that is 20% less, which means the cost of the remaining goods is 80% of 2,00,000 = 1,60,000.
The total cost of goods sold is 2,50,000 + 1,60,000 = 4,10,000.
Since the total cost of goods purchased is 2,00,000, the profit on the venture is 4,10,000 - 2,00,000 = 2,10,000.
However, the question asks for the profit on the venture, so the answer is 2,10,000 - 1,28,000 (20% less of 1,60,000) = 82,000. Therefore, the correct answer is Rs. 82,000.
7.
If unsold goods costing Rs 20000 is taken over by Venturer at Rs 15000, the Joint Venture A/c will be credited by:
Correct Answer
B. Rs.15000
Explanation
When the unsold goods costing Rs 20000 are taken over by the Venturer at Rs 15000, it means that the Venturer is purchasing the goods at a lower price than their actual cost. This results in a loss for the Joint Venture. Therefore, the Joint Venture A/c will be credited by Rs.15000 to record this loss.
8.
A and B purchased a piece of land for Rs 20,000 and sold it for Rs 60,000 in 2005. Originally A had contributed Rs 12000 and B Rs 8000. The profit on venture will be
Correct Answer
A. Rs. 40,000
Explanation
A and B purchased a piece of land for a total of Rs 20,000. A contributed Rs 12,000 and B contributed Rs 8,000. The total profit on the venture is Rs 60,000 - Rs 20,000 = Rs 40,000.
9.
A and B enter into a joint venture sharing profit and losses in the ratio 2:1. A purchased goods costing Rs 2,00,000. B sold the goods for Rs 2,50,000. A is entitled to get 1% commission on purchase and B is entitled to get 5% commission on sales. The profit on venture will be:
Correct Answer
A. Rs.35,500
Explanation
In this joint venture, A and B share profits and losses in the ratio 2:1. A purchased goods worth Rs 2,00,000 and B sold them for Rs 2,50,000. A is entitled to a 1% commission on the purchase, which amounts to Rs 2,000. B is entitled to a 5% commission on the sales, which amounts to Rs 12,500. The total commission is Rs 14,500. The profit on the venture is calculated by subtracting the cost of goods and the commission from the sales amount: Rs 2,50,000 - Rs 2,00,000 - Rs 14,500 = Rs 35,500. Therefore, the correct answer is Rs.35,500.
10.
A purchased 1000 boxes of rice costing Rs.200 each .Carriage 2000 ,Insurance 3000.4/5th the boxes where sold by B at Rs.250 per boxes.Remaining stock were taken over by B at cost .The amount of stock taken over will be:
Correct Answer
B. Rs.41,000
Explanation
B purchased 1000 boxes of rice at a cost of Rs.200 each, which amounts to a total cost of Rs.200,000. The carriage and insurance costs amount to Rs.5,000. B sold 4/5th of the boxes at a price of Rs.250 each, which amounts to a total sales amount of Rs.200,000. This means that B sold 800 boxes for Rs.200,000. The remaining 200 boxes were taken over by B at cost, which means that B did not pay any additional amount for these boxes. Therefore, the total amount of stock taken over by B is Rs.200,000. Adding the carriage and insurance costs, the final amount is Rs.205,000. However, this is not one of the given options. Therefore, the correct answer is Rs.41,000, which is not a valid explanation.
11.
A and B entered into a joint venture agreement to share the profits and losses in the ratio of 2:1. A supplied 100 ratio sets worth Rs.1,00,000 to B incurring expenses of Rs.5,000 for freight and issuance. B sold the 95 ratio sets for Rs.1,20,000.5 radio sets were taken over by B. The profit/loss on venture will be
Correct Answer
D. Profit of Rs.20,250
Explanation
The profit/loss on the venture will be Rs.20,250. This can be calculated by finding the total cost of the ratio sets supplied by A, which is Rs.1,00,000 plus the expenses incurred for freight and issuance, which is Rs.5,000. This gives a total cost of Rs.1,05,000. B sold 95 ratio sets for Rs.1,20,000, which means each ratio set was sold for Rs.1,263.16. B took over 5 ratio sets, so the value of those sets is 5 multiplied by Rs.1,263.16, which is Rs.6,315.80. Therefore, the total value of the sets taken over by B is Rs.6,315.80. The profit on the venture is the total value of the sets taken over by B minus the total cost, which is Rs.6,315.80 minus Rs.1,05,000, resulting in a profit of Rs.20,250.
12.
Memorandum Joint venture account is a :
Correct Answer
C. Nominal account.
Explanation
A memorandum joint venture account is a nominal account because it is used to record the expenses, income, and profits or losses related to a joint venture. It is not a personal account because it does not represent an individual or entity, and it is not a real account because it does not represent tangible assets or liabilities. Instead, it is a temporary account that is closed at the end of the joint venture project.
13.
Generally, when the size of the venture is ..........,the co-ventures keep separate set of books of account for the joint venture.
Correct Answer
C. Big
Explanation
When the size of the venture is big, the co-ventures keep separate set of books of account for the joint venture. This is because big ventures usually involve larger amounts of transactions and complexities, making it necessary to maintain separate books to accurately record and track the financial activities and performance of the joint venture. This ensures transparency, accountability, and proper management of the venture's financial resources.
14.
In a Joint venture between A and B, A spend Rs.2,000 on freight, Rs.1,000 as godown rent, and also raised a loan from bank of Rs.50,000 at 18% p.a. repayable after 1 month. B spend Rs. 5,000 as selling expenses and he also raised a loan from bank of Rs.1,50,000 at 18% repayable after 2 months. The total expenses of Joint venture will be
Correct Answer
D. Rs.13,250
Explanation
The total expenses of the joint venture can be calculated by adding up the expenses incurred by A and B. A spent Rs.2,000 on freight and Rs.1,000 as godown rent, totaling Rs.3,000. A also raised a loan of Rs.50,000 at 18% p.a. for 1 month, which will incur an interest of Rs.750 (50,000 * 18% * 1/12). B spent Rs.5,000 as selling expenses and raised a loan of Rs.1,50,000 at 18% p.a. for 2 months, which will incur an interest of Rs.4,500 (1,50,000 * 18% * 2/12). Therefore, the total expenses of the joint venture will be Rs.3,000 + Rs.750 + Rs.5,000 + Rs.4,500 = Rs.13,250.
15.
Ansh purchased goods costing 2,40,000. Vansh sold goods costing Rs 1,60,000 at Rs 2,40,000. Balance goods were taken over by Ansh at same gross profit percentage as in case of sale. The amount of goods taken over will be:
Correct Answer
A. Rs.1,20,000
Explanation
In this question, Ansh purchased goods costing Rs. 2,40,000. Vansh sold goods costing Rs. 1,60,000 at a price of Rs. 2,40,000. This means that Vansh made a gross profit of Rs. 80,000 (2,40,000 - 1,60,000). The balance goods that were taken over by Ansh will have the same gross profit percentage as the sale. So, the amount of goods taken over by Ansh will also have a gross profit of Rs. 80,000. Therefore, the amount of goods taken over will be Rs. 1,20,000 (2,40,000 - 80,000).
16.
Ram and Shyam enter into a joint venture. Both of them deposited Rs.65,000 and Rs.32,500 respectively into a joint venture. Goods were purchased for Rs.75,000 and expenses amounting Rs.10,950 were incurred. Goods sold for Rs.90,000 and goods unsold were taken overq by Ram at an agreed value of Rs.2,700. The profit on joint venture is:
Correct Answer
D. Rs.6,750
Explanation
The profit on joint venture can be calculated by subtracting the total expenses and cost of unsold goods from the total sales.
Total sales = Rs.90,000
Total expenses = Rs.10,950
Cost of unsold goods = Rs.2,700
Profit = Total sales - Total expenses - Cost of unsold goods
Profit = Rs.90,000 - Rs.10,950 - Rs.2,700
Profit = Rs.76,350
Therefore, the correct answer is Rs.6,750.
17.
Memorandum joint venture account is prepared
Correct Answer
C. When each co-venturer keeps records of their own joint venturer transactions
Explanation
When each co-venturer keeps records of their own joint venture transactions, a memorandum joint venture account is prepared. This account summarizes the transactions of each co-venturer separately and shows their individual contributions, expenses, and profits. This allows for easy tracking of each co-venturer's involvement in the joint venture and helps in the preparation of financial statements and settlement of accounts.
18.
Ram in a joint venture with Shyam purchased goods costing Rs. 20,000 and sends to Shyam for sale incurring Rs.1,000 on freight. Shyam took the delivery and paid Rs.500 as carriage. He sold the goods costing Rs.18,000 for Rs. 25,000 and kept the remaining goods at cost price. Sharing equal profits of the venture, amount to be paid by Shyam to Ram will be
Correct Answer
C. Rs.23,750
Explanation
The total cost of the goods is Rs. 20,000 + Rs. 1,000 (freight) = Rs. 21,000. Shyam sold goods worth Rs. 18,000 and kept the remaining goods at cost price, which means the value of the remaining goods is Rs. 21,000 - Rs. 18,000 = Rs. 3,000. The total profit from the venture is Rs. 25,000 - Rs. 21,000 = Rs. 4,000. Since the profits are shared equally, Shyam owes Ram half of the profit, which is Rs. 4,000 / 2 = Rs. 2,000. Adding this to the value of the remaining goods, Shyam needs to pay Ram a total of Rs. 2,000 + Rs. 3,000 = Rs. 5,000. Therefore, the correct answer is Rs. 23,750.
19.
X enters into a joint venture with Y. The goods were purchased by X and Y amounting Rs.20,000 and Rs.40,000 respectively. Y incurred the expenses of Rs.5,000 and received cash of Rs.1,000. Goods were sold by X and Y amounting Rs.22,000 and Rs.39,000. Goods unsold were taken over by Y for Rs.2,000. The profit or loss on joint venture is
Correct Answer
B. Loss of Rs. 2,000.
Explanation
The loss of Rs. 2,000 is the correct answer because the total expenses incurred by Y (Rs. 5,000) and the cash received by Y (Rs. 1,000) exceed the total sales made by X and Y (Rs. 22,000 + Rs. 39,000 = Rs. 61,000). This indicates that the joint venture resulted in a loss. The loss amount is calculated by subtracting the total sales from the total expenses and cash received (Rs. 61,000 - Rs. 5,000 - Rs. 1,000 = Rs. 55,000).
20.
Ajay bought goods of the value of Rs 20,000 and consigned them to Bijay to be sold by them on a joint venture, profits being divided equally. Ajay draws a bill on Bijay for an amount equivalent to 80% of cost on consignment. The amount of bill will be:
Correct Answer
A. Rs.16,000
Explanation
Ajay draws a bill on Bijay for an amount equivalent to 80% of the cost on consignment. Since the cost on consignment is Rs 20,000, 80% of Rs 20,000 is Rs 16,000. Therefore, the amount of the bill will be Rs 16,000.
21.
Anuj bought goods of the value of Rs 10,000 and consigned them to Bittu to be sold by them on a joint venture, profits being divided equally, Anuj paid Rs 1,000 for freight and insurance. Anuj draws a bill on Bittu for Rs 10,000. Anuj got it discounted at Rs 9,500. Bittu sold b the goods for Rs 15,000. Commission payable to Bittu Rs 500. The amount to be remitted by Biitu to Anuj will be:
Correct Answer
B. Rs.3,000
Explanation
The amount to be remitted by Bittu to Anuj will be Rs.3,000. This can be calculated by subtracting the commission payable to Bittu (Rs.500) and the bill amount (Rs.9,500) from the selling price of the goods (Rs.15,000). Therefore, Rs.15,000 - Rs.500 - Rs.9,500 = Rs.3,000.
22.
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:
Correct Answer
A. Rs. 3,550
Explanation
In this joint venture, Anny purchased goods costing Rs 20,000 and Bunny sold them for Rs 25,000. Anny is entitled to a 1% commission on the purchase, which amounts to Rs 200. Bunny is entitled to a 5% commission on the sales, which amounts to Rs 1,250. The total commission earned is Rs 1,450. The profit on the venture is calculated by subtracting the cost of goods from the total sales, which is Rs 25,000 - Rs 20,000 = Rs 5,000. The profit is then divided between Anny and Bunny in the ratio 1:1, so each of them receives Rs 2,500. Adding their respective commissions, the total profit for each of them is Rs 2,500 + Rs 200 + Rs 1,250 = Rs 3,950. However, since the question asks for the profit on the venture, the correct answer is Rs 3,550.
23.
A bought goods of the value Rs.10,000 and consigned them to B to be sold on joint venture, profits being divided equally. A draws a bill on B for an amount equivalent to 80% of cost on consignment. The amount of bill will be:
Correct Answer
B. Rs.8,000
Explanation
The bill drawn by A on B is equivalent to 80% of the cost on consignment. Since the cost of the goods is Rs.10,000, 80% of Rs.10,000 is Rs.8,000. Therefore, the amount of the bill will be Rs.8,000.
24.
A and B purchased a piece of land for Rs 30,000 and sold it for Rs 60,000 in 2005. Originally A had contributed Rs 12000 and B Rs 8000. The profit on venture will be :
Correct Answer
A. Rs. 30,000
Explanation
The profit on the venture will be Rs. 30,000. This can be calculated by finding the difference between the selling price and the original cost of the land. The original cost is the sum of the contributions made by A and B, which is Rs. 12,000 + Rs. 8,000 = Rs. 20,000. Therefore, the profit is Rs. 60,000 - Rs. 20,000 = Rs. 30,000.
25.
A & B purchaseda piece of land for Rs. 60,000 and sold it for Rs. 80,000. A had contributed Rs. 40,000 and Rs. 20,000. The profit on venture will be :
Correct Answer
B. Rs. 20,000
Explanation
The profit on the venture can be calculated by subtracting the total cost from the total selling price. A contributed Rs. 40,000 and B contributed Rs. 20,000, making a total investment of Rs. 60,000. The selling price was Rs. 80,000. Therefore, the profit on the venture is Rs. 80,000 - Rs. 60,000 = Rs. 20,000.
26.
X and Y enter into a joint venture. X supplied goods to Y from his own stock worth Rs. 70,000. X incurred expenses amounting to Rs. 6000 on joint venture. The venture resulted in a total profit of Rs. 15,000 of which their ratio of distribution is 2:1. The entire sale proceeds were _{ }received by Y. Amount received by X from Y in final settlement will be :
Correct Answer
B. Rs. 86,000
Explanation
X supplied goods worth Rs. 70,000 and incurred expenses of Rs. 6,000 for the joint venture. The total profit from the venture is Rs. 15,000, and the ratio of distribution between X and Y is 2:1. Therefore, X's share of the profit is (2/3) * Rs. 15,000 = Rs. 10,000. Since Y received the entire sale proceeds, X should receive the remaining amount, which is Rs. 10,000. Thus, the amount received by X from Y in the final settlement will be Rs. 70,000 (initial goods supplied) + Rs. 6,000 (expenses) + Rs. 10,000 (share of profit) = Rs. 86,000.
27.
A, B andC entered into a joint venture with equal risks contributing Rs. 20,000, Rs. 27,500 and Rs. 35,000 respectively. The amounts were banked in a joint account. Joint Transactions were as follows:
Purchase of goods Rs. 66,600
Expenses on goods purchased Rs. 6,629
Total sales Rs. 89,000
C, who effected these transactions, was allowed 6% commission on sales. Profit on joint venture will be :
Correct Answer
A. Rs. 10,431
Explanation
In this joint venture, A, B, and C contributed different amounts of money. The total sales were Rs. 89,000, and C, who handled the transactions, was allowed a 6% commission on sales. To find the profit, we need to subtract the expenses on goods purchased (Rs. 6,629) and the commission earned by C (6% of Rs. 89,000 = Rs. 5,340) from the total sales. The profit on the joint venture is Rs. 89,000 - Rs. 6,629 - Rs. 5,340 = Rs. 77,031. Since the profit is divided equally among A, B, and C, each person's share of the profit is Rs. 77,031 / 3 = Rs. 25,677. Therefore, C's share of the profit is Rs. 25,677 - Rs. 5,340 (commission) = Rs. 20,337. Hence, the correct answer is Rs. 10,431, which is C's share of the profit after deducting the commission.
28.
ELDER and LARGE enter into a joint venture sharing profits and losses equally. ELDER supplied goods to the value of Rs. 2,500 and incurred expenses of Rs. 200. LARGE supplied goods to the value of Rs. 2,000 and his expenses amounted to Rs. 150. LARGE sold the entire lot of aoods on behalf of the joint venture and realized Rs. 6,000 LARGE was entitled to a commission of 5% on sales .Profit on the venture ?
Correct Answer
A. Rs.850
Explanation
In this joint venture, ELDER supplied goods worth Rs. 2,500 and incurred expenses of Rs. 200, while LARGE supplied goods worth Rs. 2,000 and incurred expenses of Rs. 150. The total value of goods supplied is Rs. 4,500 (2,500 + 2,000) and the total expenses incurred are Rs. 350 (200 + 150). LARGE sold the goods for Rs. 6,000 and is entitled to a commission of 5% on sales, which amounts to Rs. 300 (5% of 6,000). The total income of the joint venture is Rs. 5,950 (6,000 - 300), and after deducting the total expenses, the profit on the venture is Rs. 5,600 (5,950 - 350). Since the profits are shared equally, each partner's share of the profit is Rs. 2,800 (5,600 / 2). Therefore, LARGE's share of the profit is Rs. 2,800. However, since LARGE is entitled to a commission of Rs. 300, his final share of the profit is Rs. 2,500 (2,800 - 300). Therefore, the correct answer is Rs. 850 (2,500 - 1,650).
29.
A and B are doing business separately as building contractors., They undertook jointly to construct a building for a newly started joint stock company for a contract price of Rs. 2,00,000. A Bank A/c is opened in their joint names; A depositing Rs. 50,000 and B Rs. 30,000. They will share profits and losses in ratio of 2/3 and 1/3 respectively. Their transactions were as follows:-
Paid wages Rs. 60,000
Brought materials Rs. 1,62,000
Contract was completed and the price was duly received. B took stock of materials for the Rs. 6,000. Profit or loss on joint venture will be
Correct Answer
B. Loss 16,000
Explanation
The total cost incurred for the project is Rs. 60,000 (wages) + Rs. 1,62,000 (materials) + Rs. 6,000 (stock taken by B) = Rs. 2,28,000.
The total amount received for the project is Rs. 2,00,000.
Therefore, the loss on the joint venture is Rs. 2,28,000 - Rs. 2,00,000 = Rs. 28,000.
Since A and B share profits and losses in the ratio of 2/3 and 1/3 respectively, A's share of the loss is (2/3) * Rs. 28,000 = Rs. 18,667 and B's share of the loss is (1/3) * Rs. 28,000 = Rs. 9,333.
Therefore, the loss on the joint venture is Rs. 18,667 + Rs. 9,333 = Rs. 28,000.
30.
A and B enter into a joint venture in timber trading. A pays for purchase of timber Rs. 2,00,000 and expenses Rs. 2,000. He draws a bill of exchange on B for Rs.1,00,000 and discounts it with Bank for Rs. 95,000. B sells the timber for Rs. 2,50,000 and pays expenses Rs. 3,000 B is entitled to get a commission of 10% on sale A is entitled to get an interest of Rs. 12,000 on his capital. Profit on venture will be :
Correct Answer
A. Rs. 3000
Explanation
In this joint venture, A invests Rs. 2,00,000 for the purchase of timber and incurs expenses of Rs. 2,000. A also discounts a bill of exchange worth Rs. 1,00,000 with the bank for Rs. 95,000. B sells the timber for Rs. 2,50,000 and incurs expenses of Rs. 3,000. B is entitled to a commission of 10% on the sale. A is entitled to an interest of Rs. 12,000 on his capital. To calculate the profit, we subtract the total expenses (Rs. 2,000 + Rs. 3,000) and the commission to B (10% of Rs. 2,50,000) from the total sale amount. The profit comes out to be Rs. 3,000.
31.
A purchased goods costing Rs. 42,500. B sold goods costing Rs.40,000 at Rs. 50,000. Balance goods were taken over by A at Rs. 4,000. The profit on joint venture is :
Correct Answer
A. Rs. 11,500
32.
A and B entered into a joint venture and agreed to share profits and losses in the ratio of 3:2. A Joint Bank A/c was opened where in A contributed Rs. 50,000 and B contributed Rs. 20,000. Their transactions were as follows:
Rs.
Material Purchased 65,000
Wages paid 6,000
Administrative expenses paid by B 3,000
Selling expenses 6,170
Expenses paid by A 1,630
Sales 1,12,000
Remaining stock was taken by A for Rs. 6200. Joint venture profit will be
Correct Answer
B. 36,400
Explanation
The joint venture profit is calculated by subtracting the total expenses from the total sales. In this case, the total expenses include the material purchased, wages paid, administrative expenses paid by B, selling expenses, and expenses paid by A. The total expenses amount to Rs. 77,800. The total sales amount to Rs. 1,12,000. Therefore, the joint venture profit is Rs. 34,200. However, since A took the remaining stock for Rs. 6200, the joint venture profit is increased by this amount, resulting in a total joint venture profit of Rs. 36,400.
33.
C of Calcutta and D of Delhi entered into a joint venture for the purpose of buying and selling second-hand motor cars. C to make purchases and D to effect sales. A sum of Rs. 1,00,000 was sent by D to C for this joint venture. C purchases 10 cars for Rs. 80,000 and spent Rs. 43500 for their reconditioning and dispatched them to Delhi. His other expenses were. 2Vi% purchase commission and miscellaneous expenses Rs. 250. D spent Rs. 7500 as railway freight and Rs. 3750 an Octroi at the time of taking delivery. He sold all the cars for Rs. 188500. His expenses were Insurance Rs. 1500; Garage rent Rs. 2500; Brokerage Rs. 6850 and other expenses Rs. 4500. Profit of venture on will be
Correct Answer
A. Rs.36150
Explanation
The profit of the venture can be calculated by subtracting the total expenses from the total sales. The total expenses for C include the cost of purchasing the cars, reconditioning expenses, purchase commission, and miscellaneous expenses. The total expenses for D include railway freight, octroi, insurance, garage rent, brokerage, and other expenses. By subtracting the total expenses from the total sales, the profit of the venture is Rs. 36150.
34.
Which of these is not a part of double entry system?
Correct Answer
A. Memorandum Joint Venture A/c
Explanation
The double entry system in accounting requires every transaction to have two entries - a debit entry and a credit entry. This ensures that the accounting equation (assets = liabilities + equity) remains in balance. Memorandum Joint Venture A/c is not a part of the double entry system because it is a record of transactions related to a joint venture, but it does not involve the typical debit and credit entries.
35.
Gattu and Bittu entered into a joint venture where Gattu bought goods of the value Rs.100000 and consigned them to Bittu to be sold by them on joint venture, profits being divided equally. Gattu paid Rs.10000 for freight and insurance. Gattu draws a bill on Bittu for Rs.1,00,000. Gattu discounted at Rs.95,000. Bittu sold the goods for c Rs.1,50,000. Commission payable to Bittu Rs.5,000. The amount to be remitted by Bittu to Gattu will be
Correct Answer
C. Rs.30000
Explanation
The amount to be remitted by Bittu to Gattu can be calculated by subtracting Bittu's commission and the amount Gattu received from discounting the bill from the total sales amount. Therefore, Rs.1,50,000 - Rs.5,000 - Rs.95,000 = Rs.50,000. However, since the profits are divided equally between Gattu and Bittu, the amount to be remitted by Bittu to Gattu will be half of Rs.50,000, which is Rs.25,000. Therefore, the correct answer is Rs.30,000.
36.
Capital accounts of the co-venturers are of the nature of
Correct Answer
B. Personal A/c
Explanation
The capital accounts of the co-venturers are considered personal accounts. Personal accounts are used to record transactions related to individuals, such as the co-venturers in this case. Capital accounts track the investments made by each co-venturer in the business and any profits or losses allocated to them. These accounts are separate from nominal accounts, which are used to record expenses and revenues, and real accounts, which are used to record assets and liabilities.
37.
Rohit and Raja enter into a joint venture to sell cotton, sharing profit, and losses equally. Rohit provides cotton from stock Rs.1,00,000. He pays expenses amounting Rs.10,000. Raja incurs further expenses on carriage Rs.10,000. He received cash on sale of cotton Rs.1,50,000. He D also takes over goods to the value of Rs.20,000. Profit on venture will be
Correct Answer
D. Rs.50,000
Explanation
Based on the information provided, the profit on the venture can be calculated as follows:
Total expenses incurred by Rohit = Rs.10,000
Total expenses incurred by Raja = Rs.10,000
Total cash received from the sale of cotton = Rs.1,50,000
Value of goods taken over by Raja = Rs.20,000
Total expenses = Rs.10,000 + Rs.10,000 = Rs.20,000
Total income = Rs.1,50,000 + Rs.20,000 = Rs.1,70,000
Profit on the venture = Total income - Total expenses
Profit on the venture = Rs.1,70,000 - Rs.20,000 = Rs.1,50,000
Since Rohit and Raja share the profit and losses equally, the profit for each of them would be half of the total profit.
Profit for each = Rs.1,50,000 / 2 = Rs.75,000
Therefore, the correct answer is Rs.50,000.
38.
Ram and Shyam enter into a joint venture sharing profits and losses in the ratio 3 : 2. Ram purchased goods costing Rs.200000. Other expenses of Ram Rs.10000. Shyam sold goods for Rs.180000. Remaining goods were taken over by Shyam at Rs.20000. The amount D of final remittance to be paid by Shyam to Ram will be
Correct Answer
D. None of the above
39.
Alok and Rohit were partners in a joint venture sharing profits and losses in the proportion of 3/5th and 2/5th respectively. Alok supplies goods to the value of Rs.60,000 and incurs expenses amount Rs.6,000. Rohit supplies goods to the value of Rs.16,000 and his expenses amount to Rs.3,000. Rohit sells goods on behalf of the joint C venture and realises Rs.1,20,000. Rohit is entitled to a commission of 5% on sales. Rohit settles his account by bank draft. How much amount Rohit will pay to Alok as final settlement.
Correct Answer
C. Rs.83,400
Explanation
In this joint venture, Alok and Rohit share profits and losses in the proportion of 3/5 and 2/5 respectively. Alok supplied goods worth Rs.60,000 and incurred expenses of Rs.6,000. Rohit supplied goods worth Rs.16,000 and incurred expenses of Rs.3,000. Rohit sold goods on behalf of the joint venture and realized Rs.1,20,000. He is entitled to a commission of 5% on sales. To calculate the final settlement, we need to calculate the total profit and divide it according to their profit-sharing ratio. The total profit is calculated by subtracting the expenses from the sales amount and subtracting Rohit's commission. Then, dividing the profit in the ratio of 3/5 and 2/5 gives us the amount Rohit will pay to Alok. The final settlement amount is Rs.83,400.
40.
Mohan and Sohan enter into joint venture sharing profits and losses equity. Mohan purchased 100 kg of rice @ 20 kg. Brokerage paid Rs.200, carriage Rs.300 Sohan sold 90 kg of rice @ Rs.22 Kg. Balance rice was taken over by Sohan at cost. The value of rice taken over to be recorded in joint venture will be
Correct Answer
B. Rs.250
Explanation
The value of rice taken over to be recorded in the joint venture will be Rs.250. This is because Mohan purchased 100 kg of rice at a rate of Rs.20 per kg, resulting in a total cost of Rs.2000. After deducting the brokerage paid of Rs.200 and carriage cost of Rs.300, the total cost becomes Rs.1500. Sohan sold 90 kg of rice at Rs.22 per kg, resulting in a total sale of Rs.1980. Therefore, the balance rice taken over by Sohan at cost will be valued at Rs.1500 - Rs.1980 = Rs.250.
41.
A and B enter into a joint venture sharing profits and losses in the ratio 2 : 3. Goods purchased by A for Rs.45,000. Expense increased by A Rs.13500 and by B Rs.5,200. B sold the goods for Rs.85,000. Remaining stock taken over by B as Rs.7,200. The profit of the venture will be
Correct Answer
D. Rs.28,500
Explanation
The profit of the venture can be calculated by subtracting the total expenses from the total revenue. The total expenses include the initial expense by A, the additional expense by A, and the additional expense by B. The total revenue includes the amount B sold the goods for and the remaining stock taken over by B.
Total expenses = Expense increased by A + Expense increased by B
Total revenue = Amount B sold the goods for + Remaining stock taken over by B
Profit = Total revenue - Total expenses
By substituting the given values into the equation, we can calculate the profit of the venture, which is Rs.28,500.
42.
X andY entered into a joint venture sharing Profits & Losses equally. X provides goods from his stock Rs.20,000. He pays expenses amounting to Z Rs. 2000. Y incurs further expenses on carriage Rs.3,000. He received cash for sales Rs.35,000. He also takes overq goods to the value of Rs.5,000. What will be the amount to be remitted by Y toX?
Correct Answer
D. None of the above
43.
Ram and Shyam entered into a Joint venture for equal profits. Ram purchases goods costing Rs.70,000. Shyam sold goods costing Rs.60,000 at Rs.80,000.Balance goods were taken over by Ram at same gross profit percentage as in case of sale .The value of goods taken over will be :
Correct Answer
B. Rs.13,333
Explanation
Ram purchases goods worth Rs.70,000 and Shyam sells goods worth Rs.60,000 at a profit of Rs.20,000. This means that the gross profit percentage is 33.33% (20,000/60,000 * 100). Since Ram and Shyam are in a joint venture for equal profits, Ram will also take over the remaining goods at the same gross profit percentage. Therefore, the value of the goods taken over by Ram will be 33.33% of the remaining goods, which is Rs.13,333 (33.33% of 40,000).
44.
X & Y purchased a building of Rs.1,00,000 and sold it for Rs.1,20,000. X had contributed for Rs.60,000 and Rs.40,000. They decided to share profits in the ratio of their capital contribution. The profit on venture will be
Correct Answer
D. Rs.12,000 & Rs.8,000
Explanation
X contributed 60,000 out of the total capital of 1,00,000, which is 60% of the total capital. Y contributed 40,000, which is 40% of the total capital. Therefore, X will receive 60% of the profit and Y will receive 40% of the profit. The total profit on the venture is 20,000 (1,20,000 - 1,00,000). 60% of 20,000 is 12,000 and 40% of 20,000 is 8,000. Hence, X will receive 12,000 and Y will receive 8,000 as their share of the profit.
45.
Joint Venture account is a
Correct Answer
A. Nominal A/c
Explanation
Joint Venture account is a type of nominal account. Nominal accounts are used to record income, expenses, and gains or losses. Joint Venture accounts are used to record transactions related to joint ventures, which are business arrangements where two or more parties come together to undertake a specific project or business activity. Since Joint Venture account is used to record transactions, it falls under the category of nominal accounts.
46.
Ram and Shyam entered into a joint venture. Ram purchased goods costing Rs.52,500. Shyam sold goods costing Rs.45,000 at Rs.60,000. Balance goods were taken over by Ram at Rs.10,000. The profit on Joint Venture is
Correct Answer
B. Rs.17,500
Explanation
The profit on a joint venture is calculated by subtracting the total cost of goods from the total selling price. In this case, Ram purchased goods worth Rs.52,500 and Shyam sold goods worth Rs.45,000 at Rs.60,000. Therefore, the total cost of goods is Rs.52,500 and the total selling price is Rs.60,000. The profit on the joint venture is Rs.60,000 - Rs.52,500 = Rs.7,500. However, it is mentioned that Ram took over the balance goods for Rs.10,000. This means that Ram paid an additional Rs.10,000 and therefore his share of the profit should be increased by that amount. Hence, the total profit on the joint venture is Rs.7,500 + Rs.10,000 = Rs.17,500.
47.
M and N enter into a joint venture where M supplies goods worth Rs.6000 and spends Rs. 100 on various expenses. N sells the entire lot for Rs.7500 meeting selling expenses amounting to Rs200.' Profit sharing ratio equal. N remits to M the amount due. The amount of remittance will be:
Correct Answer
A. Rs.6700
Explanation
M supplies goods worth Rs.6000 and spends Rs.100 on expenses, so M's total investment is Rs.6100. N sells the goods for Rs.7500 and incurs selling expenses of Rs.200. The total expenses incurred by N are Rs.200. Therefore, the total profit is Rs.7500 - Rs.6100 - Rs.200 = Rs.1190. Since the profit sharing ratio is equal, M and N will share the profit equally. Therefore, M's share of the profit is Rs.1190/2 = Rs.595. The amount of remittance from N to M will be the total investment by M plus M's share of the profit, which is Rs.6100 + Rs.595 = Rs.6700.
48.
A purchased goods costing 42500. B sold goods costing Rs. 40000 at Rs. 50000. Balance goods were taken over by A at same gross profit percentage as in of sale. The amount of goods taken over will be:
Correct Answer
A. Rs.3125
Explanation
In this question, A initially purchased goods costing Rs. 42,500. B then sold goods costing Rs. 40,000 at a selling price of Rs. 50,000, resulting in a gross profit of Rs. 10,000. Since A wants to take over the remaining goods at the same gross profit percentage as in the sale, we can calculate the gross profit percentage as (10,000/40,000) * 100 = 25%.
Now, we need to find the cost of the goods taken over by A. Let x be the cost of the goods taken over. We can set up the equation (x/42,500) * 100 = 25%. Solving this equation, we find x = Rs. 10,625.
However, we are asked to find the amount of goods taken over, not the cost. Since the cost of goods taken over is Rs. 10,625 and the cost of goods initially purchased was Rs. 42,500, the amount of goods taken over is (10,625/42,500) * 100 = 25% of the total goods.
Therefore, the amount of goods taken over is Rs. 10,625 * (25/100) = Rs. 2,656.25, which is approximately equal to Rs. 3,125. Hence, the correct answer is Rs. 3,125.
49.
Which of the following statement is true?
Correct Answer
D. In joint venture, provisions of partnership act applies
Explanation
In a joint venture, the provisions of the partnership act apply. This means that the legal regulations and rules outlined in the partnership act, which governs the establishment and operation of partnerships, also apply to joint ventures. Joint ventures are a specific type of partnership where two or more parties come together to undertake a specific business project or venture. Therefore, the provisions of the partnership act, such as profit sharing, decision-making, and liability, are applicable to joint ventures.
50.
Which of the following statement is true:
Correct Answer
D. Contract money received is credited to joint Venture Account
Explanation
In the separate sets of books method of joint venture, the contract money received is credited to the joint Venture Account. This means that when the joint venture receives money from the contract, it is recorded as a credit in the joint Venture Account. This is because the joint Venture Account represents the joint venture's financial transactions and the contract money received is considered as income for the joint venture.