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

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