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 : Problems on Joint Venture
Teaching Aids : PPT, Animation

CCP402.29 1
Objectives
On completion of this period, you would be
able to:
solve different problems of Joint Venture

CCP402.29 2
Recap

In the previous class, we learnt about solving typical

Joint Venture problem

CCP402.29 3
 Illustration 1

 P, Q, R entered into an agreement for a joint

venture.
 P bought goods for Rs.7, 200 and took from his
stock goods valued at Rs.2,400.
 He received from Q and R their shares of
investment Rs.3,200 each.
 P paid charges and expenses of Rs.730.
 The goods were sold for Rs.12, 200.

CCP402.29 4
 Illustration 1 contd.

 P charged 5% commission on sales and rendered

statement of account to Q and R and paid the
amounts due to them.
 Prepare Joint Venture A/c and venturers account
in the books of P.

CCP402.29 5
Solution

Books of P
Dr Joint Venture Account Cr
Rs Rs
To Cash (goods) a/c 7,200 By Cash a/c 12,200
“ Goods 2,400 (sales)
“ Cash a/c (exp) 730
“ Commission 610
(12,200*0.5)
“ P&L a/c 420
“ Q’s a/c 420
“ R’s a/c 420
12,200 12,200

CCP402.29 6
Dr Q’s Account Cr
Rs Rs
To Cash a/c 3,620 By J.V. a/c 3,200

“ J.V. a/c
(profit) 420

3,620 3,620

CCP402.29 7
Dr R’s Account Cr
Rs Rs
To Cash a/c 3,620 By J.V. a/c 3,200

“ J.V. a/c
(profit) 420

3,620 3,620

CCP402.29 8
 Illustration 2

 Singh and Swamy entered into Joint venture

sharing profits &losses in the ratio of 3:1.
 Swamy sells the goods and is allowed
commission at 5% on sales.
 Singh purchased goods Rs. 40,000 and sent
them to Swamy and Singh paid Rs. 1500 sundry
expenses and Rs. 1,500 freight.

CCP402.29 9
 Illustration 2 contd.

 Swamy also purchased goods worth Rs.30,000 and

incurred Rs. 2,500 towards freight and insurance.
 Swamy sold all the goods for Rs.90,000 and he
remitted the balance due to sing by a cheque.
 Prepare Joint venture account and Swamy account
in the books of Singh.

CCP402.29 10
Books of sing
Dr Joint Venture Account Cr
Rs Rs
To Cash 40,000 By Swamy a/c 90,000

“ Cash 3,000
(sales)
“ Swamy a/c (goods) 30,000
“ “(exp) 2,500
“ “ (com) 4,500
(90,000*5/100)
“ P&L a/c 7,500
“ Swamy a/c 2,500
90,000 90,000

CCP402.29 11
 Dr Swamy’s Account Cr

Rs Rs
To J.V a/c 90,000 By J.V.a/c (goods) 30,000
“ “ a/c (exp) 2,500
“ “ a/c (com) 4,500
“ “ a/c (profit) 2,500
“ Bank a/c 50,500

90,000 90,000
CCP402.29 12
Assignment

X and Y enter into Joint Venture contributing Rs.3,000

and Rs.2,400 sharing profits and losses in the ratio of
3:4. the amounts are paid into Joint Bank account.
Purchases are Rs.4,800 and sales Rs.6,000. Remaining
stock is taken over by Y for Rs.300. Expenses paid are
Rs.180 and outstanding expenses Rs.60. X drew out
Rs.1,200. Show the accounts in separate Joint Venture
Books.

CCP402.29 13