Q. 4 Urmila and Umesh decided to undertake a venture jointly. They agreed to share profits & losses in the ratio of 3 : 2.
Urmila supplied from her own stock goods worth `. 2,00,000 and paid `. 4,950 for freight and `. 1,200 for Sundry Expenses.
Umesh purchased goods of `. 1,95,000 for the venture and paid `. 7,000 for selling expenses. Umesh accepted a bill for 3 months of `. 95,000 drawn by Urmila as an advance. This bill was discounted immediately by Urmila for `.92,000 and the amount of discount was charged to joint venture A/c. Umesh sold all the goods for `. 5,00,000.
At the end of the venture, the accounts were settled.
Give journal entries for the above transactions, in the books of Urmila and Show Joint Venture Account and Urmila’s Account, in the books of Umesh. (12)
In the books of Urmila
Date | Particulars | LF | Debit Amt (Rs.) | Credit Amt. (Rs.) |
1. | Joint Venture A/…………………………...Dr. To Goods A/c (Being goods supplied) | 2,00,000 | 2,00,000 | |
2. | Joint Venture A/c………………………….Dr. To Cash / Bank A/c (Being paid for expenses) | 6,150 | 6,150 | |
3. | Joint Venture A/c………………………….Dr. To Umesh A/c (Being goods purchased) | 1,95,000 | 1,95,000 | |
4. | Joint Venture A/c………………………….Dr. To Umesh A/c (Being paid for expenses) | 7,000 | 7,000 | |
5. | Bills Receivable A/c……………………….Dr. To Umesh A/c (Being bill drawn and accepted due after 3 months as an advance) | 95,000 | 95,000 | |
6. | Bank A/c…………………………………..Dr. Discount A/c………………………………Dr. To Bills Receivable A/c (Being bill discounted) | 92,000 3,000 | 95,000 | |
7. | Joint Venture A/c…………………………Dr. To Discount A/c (Being discount treated as expense) | 3,000 | 3,000 | |
8. | Umesh A/c…………………………………Dr. To Joint Venture A/c (Being goods sold) | 5,00,000 | 5,00,000 | |
9. | Joint Venture A/c………………………….Dr. To Profit & Loss A/c To Umesh A/c (Being profit on Joint venture transferred) | 88,850 | 53,310 35,540 | |
10. | Cash / Bank A/c…………………………..Dr. To Umesh A/c (Being account settled) | 1,69,460 | 1,69,460 |
In the books of Umesh
Joint Venture Account
Particulars | Rs. | Rs. | Particulars | Rs. | Rs. |
To Urmila A/c (Goods) | 2,00,000 | By Cash/Bank A/c (Sales) | 5,00,000 | ||
To Urmila A/c Freight Sundry Exp. | 4,950 1,200 | 6,150 | |||
To Cash/Bank A/c (Purchase) | 1,95,000 | ||||
To Cash/ Bank A/c (Selling Expenses) | 7,000 | ||||
To Urmila (discount)A/c | 3,000 | ||||
To Profit Profit & Loss A/c Urmila A/c | 35,540 53,310 | 88,850 | |||
5,00,000 | 5,00,000 |
Urmila A/c
Particulars | Rs. | Particulars | Rs. |
To Bills Payable A/c | 95,000 | By Joint Venture A/c | 2,00,000 |
By Joint Venture A/c By Joint Venture A/c | 6,150 3,000 | ||
To Cash / Bank A/c | 1,69,460 | By Joint Venture A/c | 53,310 |
2,61,460 | 2,61,640 |
