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.
Solution
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 (2/5^{th}) 
71,080 






Surekha (3/5^{th}) 
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 