joint venture Ashok, Kishor & Anup undertook the construction of an office


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

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