Reference no: EM132678116

J and P formed a joint operation. The following were the transactions during the year:

                                            J                     P

Total Purchases              400           320
Total sales                     480           240
Expenses paid                800
Other income                 40

• The joint operation was completed at the end of the year. Each joint operator was entitled to a 10% commission on its purchases and a 20% commission on its sales. Any remaining profit or loss is divided equally.

Requirements:

Problem a. How much is the profit (loss) if the joint operation?

Problem b. On the cash settlement between the joint operators, who will be paid and by what amount?