X and Y enter into a joint venture sharing profits and losses in the ratio of 3:2.

X Is entitled to get 1% commission on purchase and Y is entitled to get 5% commission on sales

X purchased goods for Rs 4, 00,000 and sent the same to Y. Supplier allowed a cash discount of 5%.

X drew a bill on Y for an amount equivalent to 80% of the original cost of goods. X got it discounted for 3, 00,000.

Y sold 50% goods for Rs 5,00,000 and paid Rs 4,000 towards selling and admin expenses and insurance and Rs1,000 still outstanding. Y allowed a cash discount of 5% to a customer to whom goods were sold for Rs 2, 00,000. Bad debts amounted to Rs16, 000.

50% of the balance goods are taken over by Y at 60% of cost.

Remaining goods were destroyed by fire and insurance claim was received by Y to the extent of 60%.

Q1. The profit on joint venture is: ---

A) 1, 80,000

B) 1, 60,000

C) 1, 40,000

D) None of the above

Q2. The final remittance is:

Rs 1,90,000 by X to Y

Rs 1,90,000 by Y to X

Rs 1,80,000 by Y to X

Rs 1, 80,000 by X to Y.

And one more doubt how do we treat bad debts in joint venture accounting ??? were do we record bad debts ???

and how do we treat this 4th point of the question???

1) sir y are v taking B/R discount as joint venture expense ???. that expense belongs to X ??

2) commission to Y 25000???

commission to X 4000????