Idrees and Khizar entered into a joint venture to construct a building for a contract price of Rs. 4 Million. They agreed to share profits and losses in the Ratio of 65% and 35% respectively. They opened a joint bank account with Allied Bank, each of them contributing Rs. 120,000.
They incurred Rs. 14,500 miscellaneous expenses in obtaining tender form. Materials worth Rs. 2 Million were bought for cash. They paid wages to masons and other workers Rs. 15,400. Idrees paid Rs.14,800 to supervisors.
The contract was successfully completed. They had to spend Rs.9,700 in getting the building passed fit. The contract price was duly received. Khizar took over the stock of materials lying unused for Rs. 14,600.
