Reference no: EM132724692

V, I and P form a Joint for the sale of merchandise. I and P are to contribute the merchandise, V is to act as the manager and is to be allowed a bonus of 25% of the profit after deduction of the bonus as expense. I and P are to be allowed 6% interest a year on their original investment. The balance of any profit on the venture is to be divided equally among the three parties.

• On July 1, 2020, I and P contributed merchandise of P66,000 and P90,000 respectively. For the period between July 1 and October 1, V sold venture merchandise on account for P240,000, of this amount P229,500 was collected, allowed sales discounts of P4,050, and wrote off P6,450 as uncollectible. V paid joint venture expenses of P58,650 from the joint venture cash. On October 1, the venture was terminated and unsold merchandise was returned at the following value: to I, P15,000 and to P, P11,400. Cash settlement was completed by V on the same day.

Requirements:

Problem a. How much is the net profit (loss) of the joint venture before the bonus to V? Explain the answer.

Problem b. The bonus to V amounts to? Explain the answer.

Problem c. How much is the cash settlement received by I and P? Explain the answer.