1. Madhav and Pranav entered into a joint venture to buy and sell fire crackers in the Diwali festival and share the profit or loss in the ratio of 3:2 respectively. Madhav contributed Rs. 20000 and the amount was deposited in a bank a/c. They purchased firecrackers of different varieties and types worth Rs. 40000 and paid for them from the Joint Bank A/c. Madhav paid rent of shop of Rs. 500 from his private cash. Pranav spent Rs. 400 on various minor expenses from his pocket. All the firecrackers except firecrackers worth Rs. 1000 were sold in the shop for Rs. 70,000 and amount so callected was deposited into the joint bank. Remaining firecrackers were taken over by Madhav and Pranav for Rs. 450 and Rs. 400 respectively. Prepare the joint venture a/c, coventurers a/c and joint bank account.
Solution:Joint Venture Account
Dr. Particulars Amount (Rs) Cr. Particulars Amount (Rs) To Joint Bank A/c (Purchases) 40,000 By Joint Bank A/c (Sales) 70,000 To Madhav's A/c (Rent) 500 By Madhav's A/c (Stock taken) 450 To Pranav's A/c (Expenses) 400 By Pranav's A/c (Stock taken) 400 To Profit transferred to:
Madhav's A/c (3/5) - 17,970
Pranav's A/c (2/5) - 11,98029,950 Total 70,850 Total 70,850 Co-Venturers' Accounts
Dr. Particulars Madhav Pranav Cr. Particulars Madhav Pranav To Joint Venture A/c (Stock) 450 400 By Joint Bank A/c (Cont.) 20,000 - To Joint Bank (Final Settl.) 38,020 11,980 By Joint Venture A/c (Exp) 500 400 By Joint Venture (Profit) 17,970 11,980 Total 38,470 12,380 Total 38,470 12,380 Joint Bank Account
Dr. Particulars Amount (Rs) Cr. Particulars Amount (Rs) To Madhav's A/c (Contribution) 20,000 By Joint Venture A/c (Purchases) 40,000 To Joint Venture A/c (Sales) 70,000 By Madhav's A/c (Final Settl.) 38,020 By Pranav's A/c (Final Settl.) 11,980 Total 90,000 Total 90,000
2. Patil and Pandit entered into a Joint venture to purchase and sale of computers. They share profits and losses in the proportion of 1:2, Patil contributed Rs. 8,00,000 and Pandit Rs. 9,00,000. The amount was deposited into a Joint Bank Account. Patil bought 50 computers at Rs. 35,000 each and paid for them from Joint Bank Account. Freight and Insurance premium of Rs. 3500 and Rs. 12500 respectively were paid by Pandit from his private cash. 45 computers were sold at a price of Rs. 40000 each and 5 computers which were damaged in transit were repaired. Repairing charges Rs. 10000 paid by Pandit from his private cash. They were sold at a price of Rs. 39,000 each and the proceeds were deposited into Joint Bank Account. Prepare Joint venture account, Joint Bank account and Coventurers account.
Solution:Joint Venture Account
Dr. Particulars Amount (Rs) Cr. Particulars Amount (Rs) To Joint Bank A/c (Purchases) 17,50,000 By Joint Bank A/c (Sales 45 @ 40k) 18,00,000 To Pandit's A/c (Freight & Ins.) 16,000 By Joint Bank A/c (Sales 5 @ 39k) 1,95,000 To Pandit's A/c (Repairs) 10,000 To Profit transferred to:
Patil's A/c (1/3) - 73,000
Pandit's A/c (2/3) - 1,46,0002,19,000 Total 19,95,000 Total 19,95,000 Co-Venturers' Accounts
Dr. Particulars Patil Pandit Cr. Particulars Patil Pandit To Joint Bank (Final Settl.) 8,73,000 10,72,000 By Joint Bank A/c (Cont.) 8,00,000 9,00,000 By Joint Venture A/c (Exp) - 26,000 By Joint Venture (Profit) 73,000 1,46,000 Total 8,73,000 10,72,000 Total 8,73,000 10,72,000 Joint Bank Account
Dr. Particulars Amount (Rs) Cr. Particulars Amount (Rs) To Patil's A/c 8,00,000 By Joint Venture A/c (Purchases) 17,50,000 To Pandit's A/c 9,00,000 By Patil's A/c (Final Remittance) 8,73,000 To Joint Venture A/c (Sales) 19,95,000 By Pandit's A/c (Final Remittance) 10,72,000 Total 36,95,000 Total 36,95,000
3. Ajay and Abhijeet were partners in a joint venture sharing profits and losses in the proportion of 1:2. Ajay supplied goods to the value of Rs. 25000 and incurred expenses amounting to Rs. 2700. Abhijeet also supplied goods to the value of Rs. 7000 and his expenses amount to Rs. 400. Abhijeet sold all the goods for Rs. 46000. Abhijeet is entitled to a commission at 5% on sales. Abhijeet settled Ajay’s account by bank draft.
Prepare Joint venture account and Abhijeet’s account in the books of Ajay.
Solution: (In the Books of Ajay)Joint Venture Account
Dr. Particulars Amount (Rs) Cr. Particulars Amount (Rs) To Purchases A/c (Goods) 25,000 By Abhijeet's A/c (Sales) 46,000 To Bank A/c (Ajay's exp) 2,700 To Abhijeet's A/c (Goods) 7,000 To Abhijeet's A/c (Expenses) 400 To Abhijeet's A/c (Comm. @ 5%) 2,300 To P&L A/c (Ajay's Profit 1/3) 2,867 To Abhijeet's A/c (Profit 2/3) 5,733 Total 46,000 Total 46,000 Abhijeet's Account
Dr. Particulars Amount (Rs) Cr. Particulars Amount (Rs) To Joint Venture A/c (Sales) 46,000 By Joint Venture A/c (Goods) 7,000 By Joint Venture A/c (Expenses) 400 By Joint Venture A/c (Comm.) 2,300 By Joint Venture A/c (Profit) 5,733 By Bank A/c (Final Settl. received) 30,567 Total 46,000 Total 46,000
4. Harsha and Varsha entered into a joint venture to buy and sell computers and share the profit or loss in the proportion of 2:1 respectively. Harsha purchased 10 computers @ Rs. 40000 each and paid Rs. 12000 for transport charges, insurance charges, etc. Varsha bought 8 computers @ Rs. 42000 each and spent Rs. 10000 on freight and insurance. Harsha sold 8 computers @ Rs. 48000 each and paid selling expenses Rs. 2000 and took over one computer at an agreed price of Rs. 32000 for personal use. Remaining computers were sold by Varsha @ Rs. 45000 each and spent Rs. 2500 on miscellaneous expenses. The Coventurers closed their ventures and settled their accounts. Prepare the joint venture account and the other coventurer’s account in the books of Harsha.
Solution: (In the Books of Harsha)Joint Venture Account
Dr. Particulars Amount (Rs) Cr. Particulars Amount (Rs) To Bank A/c (Purchases) 4,00,000 By Bank A/c (Sales) 3,84,000 To Bank A/c (Expenses) 12,000 By Purchases A/c (Taken over) 32,000 To Varsha's A/c (Purchases) 3,36,000 By Varsha's A/c (Sales) 4,05,000 To Varsha's A/c (Expenses) 10,000 To Bank A/c (Selling Exp) 2,000 To Varsha's A/c (Misc. Exp) 2,500 To P&L A/c (Harsha's Profit 2/3) 39,000 To Varsha's A/c (Profit 1/3) 19,500 Total 8,21,000 Total 8,21,000 Varsha's Account
Dr. Particulars Amount (Rs) Cr. Particulars Amount (Rs) To Joint Venture A/c (Sales) 4,05,000 By Joint Venture A/c (Purchases) 3,36,000 By Joint Venture A/c (Expenses) 10,000 By Joint Venture A/c (Misc. Exp) 2,500 By Joint Venture A/c (Profit) 19,500 By Bank A/c (Final Settl. Received) 37,000 Total 4,05,000 Total 4,05,000