joint venture summary notes and practical questions
Each co – venture keeps records of own transactions only
Under this method following two accounts are prepared separately, there is no double entry.
Memorandum joint venture account
Joint venture with other co-venture account
Memorandum joint venture account is a similar profit and loss account, in this account income will be credited and expenses will be debited.
Profit and loss will be calculated.
No party or bank account is used but name of income or expense account will be used while preparing this account.
Joint venture with other co-venture account
It is a personal account, records only own transactions like goods sold, expenses incurred, goods purchased or supplied etc. own profit of MJV will be transferred to this account, remittance to coventure will be calculated.
Any transactions of other co venture will not be recorded any where in this account.
A and B are coventures having profit and loss ratio 3:2. A contribute 10,000 and B 20,000
A supplied goods of 3,000 and B 2,000.
Firm incurred expenses freight 500, cartege 1,000.
Firm purchase goods of Rs. 20,000.
A incurred expenses 300 and B 200 on behalf of firm.
Firm sold goods in Rs. 30,000 and balance carried by A 8,000 and B 9,000.
Pass journal entries and prepare necessary accounts.
A and B are coventures having profit and loss ratio 3:2. A supplied goods of 3,000 and B 2,000.
Firm incurred expenses freight 500, cartege 1,000.
B supplied goods of Rs. 20,000.
A incurred expenses 300 and B 200 on behalf of firm.
Firm sold goods in Rs. 30,000 and balance carried by A 8,000 and B 9,000.
Pass journal entries and prepare necessary accounts.
X and Y are co ventures. Profit and loss ration 2:1.X supplied goods Rs. 1,00,000 to Y by incurring expenses Rs. 10,000
Y supplied goods RS. 70,000 to x by incurring expenses Rs. 7,000.
Y sold 80 % of goods received at Rs. 95,000 and remaining carried by him at 90% of original purchase cost only.
X sold 70 % of goods received at Rs. 65,000 and remaining carried by him at 80% of original purchase cost plus proportionate expenses.
Prepare Joint venture account and Y’s account in the books of X.
In the books of X
Joint venture account
| Particular | Rs. | Particular | Rs. |
| To purchase | 1,00,000 | By Y-sale | 95,000 |
| To bank exp. | 10,000 | Goods | 18,000 |
| To Y – goods | 70,000 | By bank | 65,000 |
| – Exp. | 7,000 | Drawings | 18,480 |
| P & L – 6,320 | |||
| Y – 3,160 | |||
| 9,480 | |||
| 196480 | 196480 |
Drawings of Y 1,00,000*20/100=20,000*90%=18,000
Goods held by X 70,000*30=21,000
Purchase cost 21,000
proportionate expenses
70,000 : 7,000
21,000 : 2,100
23,100 *80%= 18480
Y’s Account
| Particular | Rs. | Particular | Rs. |
| To J.V. sales | 95,000 | By J.V. Goods | 70,000 |
| Goods | 18,000 | By J.V. Exp. | 7,000 |
| Profit | 3,160 | ||
| By bank | 32,840 | ||
| 1,13,000 | 1,13,000 |
X and Y are co ventures. Profit and loss ratio 1:1. X supplied goods Rs. 70,000 to Y by incurring expenses Rs. 3,500
Y supplied goods RS. 60,000 to x by incurring expenses Rs. 3,000.
Y sold 80% of goods received at Rs. 75,000 and remaining goods are lost in godown, insurance company paid 2,000.
X sold 70 % of goods received at Rs. 55,000 and remaining goods lost, insurance company paid 50% of original purchase cost plus proportionate expenses.
Prepare Joint venture account and Y’s account in the books of X.
In the books of X
Joint venture account
| Particular | Rs. | Particular | Rs. |
| To purchase | 70,000 | By Y-sale | 75,000 |
| To bank exp. | 3,500 | insurance | 2,000 |
| To Y – goods | 60,000 | By bank | 55,000 |
| – Exp. | 3,000 | insurance | 9,450 |
| P & L – 2,475 | |||
| Y – 2,475 | 4,950 | ||
| 1,41,450 | 1,41,450 |
Goods held by X 60,000*30=18,000
Purchase cost 18,000
proportionate expenses
60,000 : 3,000
18,000 900
18,900*50%
= 9,450
Y’s Account
| Particular | Rs. | Particular | Rs. |
| To J.V. sales | 95,000 | By J.V. Goods | 70,000 |
| Goods | 18,000 | By J.V. Exp. | 7,000 |
| Profit | 3,160 | ||
| By bank | 32,840 | ||
| 1,13,000 | 1,13,000 |