Question

Surekha and Sangita decided to undertake a venture jointly. They agreed to share profits and losses in the ratio of 3 : 2. Surekha supplied from her own stock goods worth Rs. 4,00,000 and paid Rs. 9,900 for freight and Rs. 2,400 for insurance. Sangita purchased goods of Rs. 3,90,000 for the venture and paid Rs 14,000 for selling expenses. Sangita accepted a bill for 3 months of Rs. 1,90,000 drawn by Surekha as an advance. The bill was discounted immediately by Surekha for Rs. 1,84,000 and the amount of discount was charged to Joint Venture Account. Sangita sold all the goods for Rs. 10,00,000. At end of the venture, the accounts were settled. Give journal entries in the books of Surekha.

Answer 1

In the books of Surekha Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Joint Venture A/c	Dr.		4,00,000
	To Purchases A/c				4,00,000
	(Goods supplied for Joint Venture)
	Joint Venture A/c			12,300
	To Bank A/c (9,900 + 2,400)				12,300
	(Expenses paid for Joint Venture)
	Joint Venture A/c	Dr.		3,90,000
	To Sangita’s A/c				3,90,000
	(Goods purchased by Sangita for Joint Venture)
	Joint Venture A/c	Dr.		14,000
	To Sangita’s A/c				14,000
	(Selling expenses paid by Sangita)
	Bills Receivable A/c	Dr.		1,90,000
	To Sangita’s A/c				1,90,000
	(Acceptance received)
	Bank A/c	Dr.		1,84,000
	Discount A/c	Dr.		6,000
	To Bills Receivable A/c				1,90,000
	(Sangita’s acceptance discounted with bank)
	Joint Venture A/c	Dr.		6,000
	To Discount A/c				6,000
	(Discount on bill treated as Joint Venture expenditure)
	Sangita’s A/c	Dr.		10,00,000
	To Joint Venture A/c				10,00,000
	(Goods sold)
	Joint Venture A/c	Dr.		1,77,700
	To Profit & Loss A/c				1,06,620
	To Sangita’s A/c				71,080
	(Profit made on Joint Venture)
	Bank A/c	Dr.		3,34,920
	To Sangita’s A/c				3,34,920
	(Final payment received)

 

In the Books of Sangita Joint Venture Account
Dr.								Cr.
Date		Particulars		Amount (Rs)	Date	Particulars	Amount (Rs)
		Surekha		4,00,000		Bank	10,00,000
		Surekha:
		Freight	9,900
		Insurance	2,400	12,300
		Bank:
		Purchases	3,90,000
		Selling Expenses	14,000	4,04,000
		Surekha (Bill discounted)		6,000
		Profit transferred to:
		Profit & Loss A/c (2/5th)	71,080
		Surekha (3/5th)	1,06,620	1,77,700
				10,00,000			10,00,000

 

Surekha’s Account
Dr.							Cr.
Date		Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
		Bills Payable	1,90,000		Joint Venture (Goods)	4,00,000
		Bank (Final Payment)	3,34,920		Joint Venture (Freight & Sundry Expenses)	12,300
					Joint Venture (Discount on bill)	6,000
					Joint Venture (Profit)	1,06,620
			5,24,920			5,24,920