Solution-What is the net profit of the joint operation

What is the net profit of the joint operation

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Reference no: EM132703852

Problem - Dirk, Terry and Josh formed a joint operation. The contractual arrangement provides that Dirk is to manage the joint operation and is to receive a fee of 15% of the profit after deduction of the fee as an expense of the joint operation, the net profit, after the fee has been agreed to be divided as follows: Dirk, 25%; Terry, 40% and Josh, 35%. After five months, the joint operation is terminated. The trial balance prepared by Dirk show the following balances:

	Debit	Credit
Investment in Joint Operation		P45,000
Terry, capital	P2,500
Josh, capital		10,000

The joint operation has still some unsold merchandise worth P12,500. Dirk agreed to purchase such at cost. The fee of Dirk has not yet been taken up. What is the net profit of the joint operation after the fee to Dirk?

Reference no: EM132703852

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What is the net profit of the joint operation

Reference no: EM132703852

Reference no: EM132703852

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