Question

Devendra of Ahmednagar and Mahendra of Pune entered into joint venture to consign goods to Virendra of Jalgaon to be sold on their joint risk, which is proportion of 4/5 and 1/5 respectively.

Devendra sent goods worth Rs 10,00,000 paying carriage and freight Rs 12,000 and other expenses Rs 4,500.

Mahendra sent goods worth Rs 6,00,000 paying carriage and freight Rs 9,500 and other expenses Rs 3,400.

Devendra drew a bill of exchange on Mahendra for Rs 90,000 as an advance which was discounted for Rs 84,000 by Devendra.

The amount of discount, Rs 6,000 was to be treated as joint venture expense.

Virendra sold all the goods for Rs 19,00,000. He deducted his sales commission @ 5% on total sales and expenses Rs 12,000 from the sales proceeds.

Virendra remitted Rs 11,00,000 to Devendra and the balance to Mahendra both by bank draft.

The co-venturers settled their accounts.

You are required to prepare Joint Venture A/c, Mahendra's A/c and Virendra's A/c in the books of Devendra.

Answer 1

In the books of  Devendra

Joint Venture A/c

Date		Particulars		Amount (Rs)	Date	Particulars	Amount (Rs)
		Purchases		10,00,000		Virendra (Sales)	19,00,000
		Bank:
		Carriage & Freight	12,000
		Other Expenses	4,500	16,500
		Mahendra:
		Purchases	6,00,000
		Carriage & Freight	9,500
		Other Expenses	3,400	6,12,900
		Discount (B/R discounted)		6,000
		Virendra:
		5%  Commission on sale	95,000
		Selling Expenses	12,000	1,07,000
		Profit transferred to:
		P & L A/c (4/5th)	1,26,080
		Mahendra (1/5th)	31,520	1,57,600
				19,00,000			19,00,000

 Mahendr's account 

Date		Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
		Virendra	6,93,000		Joint Venture	6,12,900
		Bank (Final Payment)	41,420		Bills Receivable (Advance)	90,000
					Joint Venture (Profit)	31,520
			7,34,420			7,34,420

Virendra's account

Date		Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
		Joint Venture	19,00,000		Joint Venture	1,07,000
					Bank	11,00,000
					Mahendra (Balancing Figure)	6,93,000
			19,00,000			19,00,000