DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : Y.Yella Reddy
Designation : HCCP
Branch : DCCP
Institute : 026,S.G.Govt.Polytechnic,
Adilabad
Year/Semester : IV Semester
Subject : Accountancy-III
Subject Code : CCP-402
Topic : Joint Venture
Duration : 50 Min.
Sub Topic : Accounts maintained by one Co-
venturer
Teaching Aids : PPT, Animations
CCP402.20 1
Objectives

On completion of this period you would be

able to know

 Procedure for the maintenance of accounts by

one Co-Venturer.

CCP402.20 2
Recap:

In the last class we learned about the

Accounts kept by one venturer.

Joint venture account.

Personal accounts of other venturers.

Model entries.

CCP402.20 3
 Illustration 1
 Shiva, Saleem and David entered into an agreement for a
Joint Venture.
 Shiva purchased goods from Mohan for Rs.72,000 and
took from his own stock goods valued at Rs.24,000.
 He received Rs.32,000 each from Saleem and David as
their share of investment for the Venture.
 Shiva paid charges on Venture Rs.7,300 and sold goods
for Rs.1,22,000.
 He charged 5% commission on Sales and rendered
statements to Saleem and David with cheques for the
amount due to them.
 Prepare the necessary accounts in the books of Shiva.
CCP402.20 4
Solution
Method I: Maintenance of Accounts in one
coventure’rs A/c
JOURNAL ENTRIES IN THE BOOKS OF SHIVA

Particulars Amount Amount

Joint Venture a/c ……Dr 72,000

To Bank 72,000
(Being the goods purchased
For consignment)
Joint Venture a/c ……Dr 24,000
To goods a/c 24,000
(Being the goods provided for
joint venture from own store)

CCP402.20 5
Solution contd.

Particulars Amount Amount

Bank a/c 62,000

To Saleem a/c 32,000
To David a/c 32,000
(Being their share of
investment received from other
coventures)

Joint Venture a/c ……Dr 7,300

To Bank a/c 7,300
(Being the expenses paid)

CCP402.20 6
Solution contd.

Particulars Amount Amount

Bank a/c ……Dr

To Joint Venture a/c 1,22,000 1,22,000
(Being the sales made)
Joint Venture a/c ……Dr 6,100
To commission a/c 6,100
(Being the commission charged)

CCP402.20 7
Solution contd.

Particulars Amount Amount

Joint venture a/c 12,600

To P&L a/c 4,200
To Saleem a/c 4,200
To David a/c 4,200
(Being the profit on joint venture
distributes equally)

CCP402.20 8
Solution contd.

Particulars Amount Amount

Saleem a/c 36,200

David a/c 36,200
To Bank a/c 72,400
(Being the balance due to
coventurers s paid)

CCP402.20 9
 Ledger accounts in the books of Shiva

Joint Venture Account

Particulars Amount Particulars Amount
To Bank a/c 72,000 By Bank a/c 1,22,000
(purchases) (sales)
To goods 24,000

To Bank 7,300
To Commission a/c 6,100
(1,22,000*0.5)
To P&L a/c 4,200
To saleem a/c 4,200
To David 4,200
1,22,000 1,22,000
CCP402.20 10
 Saleem’s Account

Particulars Amount Particulars amount

To Bank a/c 36,200 By Bank a/c 32,000

By J.V.a/c 4,200
(profit )

36,000 36,000

CCP402.20 11
 David’s Account

Particulars Amount Particulars Amount

To Bank a/c 36,200 By Bank a/c 32,000

By Jt.Vr.a/c 4,200
(profit )

36,000 36,000

CCP402.20 12
Illustration 2

 Sudhakar and Pruthvi enter into a Joint venture with out the
firm name, to do business in consumer goods and share
the profit & loss in the ratio 3:2 respectively.
 Sudhakar buys goods for Rs. 40,000 and incurs an
expenditure of Rs. 1500 on the same
 Pruthvi sold the goods for Rs. 60,000 and spends Rs. 2500
on the expenses.
 He claims a Commission of 5% on Sales as agreed upon.
 Show the necessary Ledger accounts in the books of
Sudhakar.

CCP402.20 13
Solution Joint venture Account

Particulars Amount Particulars Amount

To Cash 40,000 By Pruthivi’s a/c 60,000

To Cash 1,500 36,000

To Pruthivi a/c (exp) 2,500

To Pruthivi a/c(com) 3,000

To P&L a/c 7,800
To Pruthivi’s a/c 5,200
60,000 60,000

CCP402.20 14
 Pruthivi’s Account

Particulars Amount Particulars Amount

To Jt.Vr a/c 60,000 By J.V. a/c (exp) 2,500

By J.V. a/c (com) 3,000
By J.V. a/c (profit ) 5,200
By bank a/c 49,300
60,000 60,000

CCP402.20 15
Assignment
 Shekhar and Pavani enter into a Joint venture with
out the firm name, to do business in consumer
goods and share the profit & loss in the ratio 3:2
respectively.
 Shekhar buys goods for Rs. 20,000 and incurs an
expenditure of Rs. 500 on the same
 Pavani sold the goods for Rs. 30,000 and spends
Rs. 1,500 on the expenses.
 she claims a Commission of 5% on Sales as
agreed upon.
 Show the necessary Ledger accounts in the
books of Shekhar.
CCP402.20 16