Find what is the profit of the joint operation for the month

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On May 1, 2011, Big and Small formed a joint operation to acquire and sell a special type of merchandise. The contractual arrangements provide that Big is to manage the joint operation for a fee and that gains, and losses are to be divided equally. On May 1, 2011, Small invests cash of P50,000, which was used to purchase merchandise. Big incurs expenses amounting to P2,500. On May 20, one half of the merchandise was sold for P36,000 cash.

Question 1: What is the profit (loss) of the joint operation for the month of May? (Assuming no further transactions occurred until the end of the month)

Reference no: EM132586453

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