Joint venture Dimple and Simple entered into a joint venture.

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