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
|
