Ashok, Kishor & Anup undertook the construction of an office building at a contract price of Rs. 10,00,000. Receivable in cash Rs. 6,00,000 and Rs, 4,00,000 in shares. They agreed to share profits and losses equally. They opened the joint bank a/c and contributed the following amount. Ashok – Rs. 3,00,000, Kishor - Rs. 3,00,000, and Anup – Rs.2,00,000. Ashok paid Rs. 10,000 as architect fees, Kishor brought in the venture mixture of Rs. 25,000 and Anup brought in motor truck of Rs. 55,000. The following transactions were made from Joint bank A/c. Purchase of material Rs. 4, 50,000, Plant – Rs. 30,000 and freight and wages – Rs. 1, 50,000. At the close of the venture, Ashok took away the unused material worth Rs. 8,000. Kishor took away the mixture worth Rs. 15,000 and Anup took away the truck worth Rs. 35,000. The scrap value realised of the plant was Rs. 6,000. The Contract price was received in full and Kishor took over the shares for Rs. 4,10,000. Prepare Joint Venture A/c, Joint Bank A/c & co – ventures 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 Ashok's A/c To Kishore's A/c To Anup's A/c [Being the initial contribution is made] | | 8,00,000 | 300000 300000 200000 |
| 2. | Joint venture a/c ……… Dr. To Ashok's A/c To Kishore's A/c To Anup's A/c [Being the venture mixture and motor truck brought and architect fees paid] | | 90000 | 10000 25000 55000 |
| 3. | Joint venture A/c ……… Dr. To Joint bank A/c [Being the material and plant purchased and freight and wages paid] | | 630000 | 630000 |
| 4. | Ashok's A/c ……… Dr. Kishores's A/c ……… Dr. Anup's A/c ……… Dr. To Joint venture A/c [Being the unused materials taken over] | | 8000 15000 35000 | 58000 |
| 5. | Joint Bank A/c ………… Dr. To Joint venture A/c [Being the plant sold at scrap] | | 6000 | 6000 |
| 6. | Joint Bank A/c ……… Dr. Shares A/c ……… Dr. To Joint venture A/c [Being the contract price received] | | 600000 400000 | 1000000 |
| 7. | Kishore's A/c ……… Dr. To Shares A/c [Being the shares taken over at premium] | | 410000 | 410000 |
| 8. | Shares A/c ………… Dr. To Joint venture A/c [Beinng the premium made on shares] | | 10000 | 10000 |
| 9. | Joint venture A/c ……… Dr. To Ashok's A/c To Kishore's A/c To Anup's A/c (Being profit made on joint venture) | | 354000 | 118000 118000 118000 |
| 10. | Ashok's A/c ……… Dr. Kishore's A/c ……… Dr. Anup's A/c ……… Dr. To Joint Bank A/c [Being the final settlement is made] | | 420000 18000 338000 | 776000 |