Use the following information for questions 13 & 14:

Ranto and Santo formed a joint arrangement to acquire and sell a special type of merchandise. Ranto is to manage the joint arrangement and to furnish the capital. The joint operations are to share equally any gain or loss on the joint operations. On April 01, 2013, Santo sent Ranto P 10,000 cash, which was all used to purchase merchandise. Ranto paid freight of P 240 on the merchandise purchased. On April 27, one half of the merchandise was sold for P 7,200 cash. Ranto paid the cost of delivering merchandise to customers which amounted to P 260. No further transactions occurred until the end of the month.

13. The profit (loss) of the joint arrangement for the month of April, 2013 is:

a. 1,820 c. (1,700)

b. 1,950 d. None

14. The account of Santo in the books of Ranto shows a debit (credit) balance on April 30, 2013 after recognizing the profit (loss) on the uncompleted joint arrangement:

a. (10,910) c. 10,850

b. 10,975 d. 0