joint venture Suresh and Ramesh entered into a joint venture

Suresh and Ramesh entered into a joint venture to construct a building at a contract price of Rs. 7,00,000. They agreed to share profits and losses in the ratio of 2:1. Suresh deposited Rs. 5,00,000 and Ramesh Rs. 1,00,000 into joint bank. The transactions were as follows.

• Purchase of materials Rs. 3,50,000
• Tools and equipment Rs. 1,00,000.
• Wages Rs. 1,20,000
• Architect fees Rs. 25,000

Besides these, Suresh supplied material worth Rs. 15,000 and Ramesh supplied material worth Rs. 13,500. Building was ready and contract price received. Prepare Joint venture A/c, Joint Bank A/c & Co – Venturer’s A/c.

Solution:

Journal entries in the Books of Joint venture

Date	Particulars	Lf	Debit (Rs.)	Credit (Rs.)
? 1.	Joint Bank A/c ……… Dr. To Suresh's A/c To Ramesh's A/c [Being the initial contribution is made]		600000	500000 100000
2.	Joint venture A/c ……… Dr. To Joint Bank A/c [Being the materials and tools and equipments were purchased and wages and architect fees paid]		595000	595000
3.	Joint Venture A/c ……… Dr. To Suresh's A/c To Ramesh's A/c [Being the materials supplied]		28500	15000 13500
4.	Joint Bank A/c ……… Dr. To Joint venture A/c [Being the contract price is received]		700000	700000
5.	Joint venture A/c ………… Dr. To Suresh's A/c To Ramesh's A/c [Being profit made on joint venture]		76500	51000 25500
6.	Suresh's A/c ……… Dr. Ramesh's A/c ……… Dr. To Joint Bank A/c [Being the final settlement is made]		566000 139000	705000