Question

Rokadimal of Rajkot and Gunjal of Pune, entered into a Joint Venture to purchase and sale goods and agreed to share profit and losses in the proportion of 4 : 1 respectively.

Rokadimal sent goods of Rs 4,00,000 to Gunjal for sale.

Rokadimal paid Rs 11,500 for carriage.

Rokadimal drew a bill of Rs 95,000 on Gunjal, which he accepts.

Rokadimal discounted this bill with the bank for Rs 92,000.

The amount of discount is to be treated as joint venture expenditure.

Gunjal paid Rs 13,500 got advertisement.

Gunjal sold all the goods for Rs 5,00,000.

Gunjal paid Rs 7,000 for selling expenses and he is entitled for a commission on sales at 5% Co-venturers settled their accounts.

Give Journal Entries in the books of Gunjal of Pune.

Answer 1

In the books of Gunjal Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Joint Venture A/c	Dr.		4,00,000
	To Rokadimal				4,00,000
	(Goods sent for Joint Venture)
	Joint Venture A/c	Dr.		11,500
	To Rokadimal				11,500
	(Expenses paid)
	Rokadimal A/c	Dr.		95,000
	To Bills Payable A/c				95,000
	(Acceptance given)
	Joint Venture A/c	Dr.		3,000
	To Discount A/c				3,000
	(Discount charges charged to Joint venture)
	Joint Venture A/c	Dr.		13,500
	To Bank A/c				13,500
	(Expenses paid)
	Joint Bank A/c	Dr.		5,00,000
	To Joint Venture A/c				5,00,000
	(Goods sold)
	Joint Venture A/c	Dr.		7,000
	To Bank A/c				7,000
	(Selling expenses paid)
	Joint Venture A/c	Dr.		25,000
	To Gunjal’s A/c				25,000
	(Commission charged in Joint Venture)
	Joint Venture A/c	Dr.		40,000
	To Rokadimal				32,000
	To Profit & Loss A/c				8,000
	(Profit shared on Joint Venture)
	Rokadimal	Dr.		1,48,500
	To Bank A/c				1,48,500
	(Final Payment made to Rokadimal)

Working Notes:

1. Calculation of commission on sale

\[\text{Commission on Sale} = 5, 00, 000 \times \frac{5}{100} = Rs 25,000\]

2.Calculation of profit and distribution amongst the co-venturers

\[\begin{array}{ccl}Profit & = & 5, 00, 000 -  4, 00, 000 - 11, 500 - 3, 000 - 13, 500 - 7, 000 - 25, 000 \\ = & 40, 000\end{array}\]

\[\begin{array}{l}\text{Distribution of Profit} \\ \text{Rokadimal's Share} = \frac{4}{5} \times 40, 000 = Rs32, 000 \\ \text{Gunjal's Share} = \frac{1}{5}\hspace{0.167em} \times 40, 000 = Rs8, 000\end{array}\]

3. Calculation of final payment to Rokadimal by Gunjal

Gunjal’s Account
Dr.			Cr.
Date	Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
	Joint Bank (Final Payment)	1,48,500		Joint Venture (Commission)	25,000
				Joint Venture (Expenses)	13,500
				Joint Venture (Selling Expenses)	7,000
				Bills Receivable	95,000
				Joint Venture (Profit)	8,000
		1,48,500			1,48,500