Joint venture Ram and Rajiv entered into a Joint venture to construct a conference hall


Ram and Rajiv entered into a Joint venture to construct a conference hall at a contract price of Rs. 3,00,000. Ram contributed Rs. 1,00,000 and Rajiv contributed Rs. 1,50,000. Ram brought in material worth Rs. 2,000 and Rajiv Paid transportation charges worth Rs. 6,000 Plant was purchased for Rs. 50,000 and material worth Rs. 2,00,000 were also purchased. On completion, plant was sold for Rs. 20,000. Due to certain defect, one bill of Rs. 20,000 was not recovered and the balance was received in cash. Venturers share profits in the ratio of their initial contributions. Prepare Joint Venture A/c, Joint Bank A/c and Co – venturer’s A/c and pass Journal entries.
Solution:
Journal entries in the books of Joint venture
Date
Particulars
Lf
Debit (Rs.)
Credit (Rs.)
? 1.
Joint Bank A/c ……… Dr.
To Ram's A/c
To Rajiv's A/c
[Being the initial contribution is made]

250000

100000
150000
2.
Joint venture A/c ……… Dr.
To Ram's A/c
To Rajiv's A/c
[Being the material purchased and transportation charges paid]

8000

2000
6000
3.
Joint venture A/c …………. Dr.
To Joint Bank A/c
[Being the materials purchased and plant purchased]

250000

250000

4.
Joint Bank A/c ……… Dr.
To Joint venture A/c
[Being the plant was sold]

20000

20000
5.
Joint Bank A/c ……… Dr.
To Joint venture A/c
[Being the contract price received after the deduction of Rs. 20000]

280000


280000
6.
Joint venture A/c ……… Dr.
To Ram's A/c
To Rajiv's A/c
[Being the profit made on joint venture]

42000

14800
25200
7.
Ram's A/c ………… Dr.
Rajiv's A/c ………… Dr.
To Joint Bank A/c
[Being the final settlement is made]

118800
181200


297000

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