Question
'Arman' and 'Malik' initiated a business venture with
their individual investments. 'Arman,' who actively participated in the business, received Rs. 2,400 as a commission from the total profit. The remaining profit was divided in proportion to their respective investments. 'Arman' also received 75% of this remaining amount as his profit share. Additionally, 'Malik' received a profit share for his investment that was Rs. 4,000 less than 'Arman's profit share for his investment. Calculate the total profit generated by the business.Solution
We can say that, Let the total profit received from the business be Rs.(4a + 2400) Amount taken by 'Arman' for managing the business = Rs.2,400 So, remaining amount = 4a + 2400 - 2400 = Rs.'4a' Amount received by 'Arman' as his profit share (for his investment) = (0.75 × 4a) = Rs.'3a' Profit share received by 'Malik' = 4a - 3a = Rs.'a' ATQ; 3a - a = 4000 Or, 2a = 4000 Or, a = 2000 So, total profit earned by the business = 4a + 2400 = 4 × 2000 + 2400 = Rs. 10,400
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Internal check is a part of the:
Why must auditors obtain an understanding of internal control even if they do not intend to rely on it?
