Dimple and Simple entered into a joint venture. They
agreed to share profits and losses in the proportion of their initial
contributions to the joint venture. They opened a joint Bank A/c. and deposited
Rs. 60,000 and Rs. 40,000 respectively as initial contributions. They made cash
purchases of Rs. 70,000. They also paid Rs. 4,500 for insurance and freight and
Rs. 1,750 for sundry expenses. At the end of the venture, the sales amounted to
Rs. 1, 10,000/- There was unsold stock of goods worth Rs. 5000. Simple took
over the unsold stock. The Joint Venture was closed. You are asked to prepare
Joint Venture A/c. Joint Bank A/c and Co – ventures A/c.
Soluition
Journal entries in the books of Joint venture.
Date
|
Particulars
|
Lf
|
Debit (Rs.)
|
Credit (Rs.)
|
? 1.
|
Joint Bank A/c ……… Dr.
To Dimple's A/c
To Simple's A/c
[Being the initial contribution is made]
|
1, 00, 000
|
60000
4000
|
|
2.
|
Joint venture A/c ……… Dr.
To Joint Bank A/c
[Being the cash purchases made]
|
70000
|
70000
|
|
3.
|
Joint venture A/c ……… Dr.
To Joint Bank A/c
[Being the insurance, freight and sundry expenses paid]
|
6250
|
6250
|
|
4.
|
Joint Bank A/c ………… Dr.
To Joint Venture A/c
[Being the goods are sold]
|
1, 10, 000
|
1, 10, 000
|
|
5.
|
Simple's A/c ………… Dr.
To Joint venture A/c
[Being the unsold stock of goods taken over]
|
5000
|
5000
|
|
6.
|
Joint venture A/c ………… Dr.
To Dimple's A/c
To Simple's A/c
[Being profit made on joint venture]
|
38750
|
23250
15500
|
|
7.
|
Dimple's A/c ………… Dr.
Simple's A/c …………… Dr.
To Joint Bank A/c
[Being the final settlement is made]
|
83250
50500
|
133750
|
