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 : CCP402
Topic : Joint Venture
Duration : 50 Mts
Sub Topic : Maintenance of Accounts by all the
Venturers
Teaching aids : PPT and Animations
CCP402.24 1
Objectives :

On completion of the period, you would be

able to know:
 Problems on Maintenance of Joint Venture
accounts by all the Venturers

CCP402.24 2
Recap :

In the last class we learned about the

concept of:

 Maintenance of Joint Venture accounts by

all Venturers by solving problems

CCP402.24 3
 Illustration 1
 Ramesh and Mahesh share profits and losses
equally in Joint Venture.
 Ramesh agreed to sell goods on a commission @
10% on sales.
 Mahesh purchased goods for Rs.25,000 and sent to
Ramesh by paying Rs.1,000 towards freight and
other expenses Rs.500.
 Ramesh sent a Cheque as advance for Rs.15,000 to
Mahesh.

CCP402.24 4
 Illustration 1 contd.
 Ramesh purchased goods for Rs.15,000 and incurred
Rs.800 towards freight and insurance, Rs.400 towards
customs duty and Rs.500 towards other expenses.
 Ramesh sold all the goods for Rs.70,000 and he
remitted the balance due to Mahesh by cheque in final
settlement.
 Prepare necessary accounts in the books of both the
parties.

CCP402.24 5
 Books of Ramesh

Joint Venture Account

Dr Cr
Rs. Rs.

To Mahesh 25,000 By Cash a/c 70,000

(goods) a/c (sales)
“ “ (exp) 1,500
“ Cash a/c 15,000
(goods)
“ Cash a/c (exp) 1,700

“ Commission 7,000
(70,000*0.1)
“ P & L a/c 9,900
“ Mahesh’s a/c 9,900
70,000 70,000
CCP402.24 6
 Mahesh’s Account

Dr Cr
Rs. Rs.

To Cash a/c 15,000 By J.V. a/c 25,000

(goods)
To Cash 21,400 “ J.V. a/c 1,500
(exp)
“ J.V. a/c 9,900
(profit)
36,400 36,400

CCP402.24 7
 Books of Mahesh

Dr Joint Venture Account Cr

Rs. Rs.

To Cash a/c 25,000 By Ramesh 70,000

(goods) a/c (sales)
“ “ (exp) 1,500
“ Ramesh a/c 15,000
(goods)
“ Ramesh a/c 1,700
(exp)
“ Commission 7,000
(70,000*0.1)
“ P & L a/c 9,900
“ Ramesh’s a/c 9,900
70,000 70,000
CCP402.24 8
 Ramesh’s Account
Dr Cr
Rs. Rs.
To J.V. a/c 70,000 By Cash a/c 15,000
(adv)
“ J.V. a/c 15,000
(goods)
“ J.V. a/c 1,700
(Exp)
“ J.V. a/c 7,000
(Com)
“ J.V. a/c 9,900
(Profit)
“ Cash a/c 21,400
70,000 70,000

CCP402.24 9
 Illustration 2

 Rama and Krishna were partners in a Joint

Venture sharing profits and losses in the ratio of
3 : 2 respectively.
 Rama supplies goods to the value of Rs.10,000
and incurs on freight Rs.500.
 Krishna also supplied goods to the value of
Rs.8,000 and incurs Rs.400 towards freight and
other incidental charges.

CCP402.24 10
 Illustration 2 contd.

 Krishna sells the entire stock of goods on behalf

of the joint venture for Rs.25,000.
 Krishna is also entitled to a commission of 5% on
sales.
 Krishna settles his account by remitting a bank
draft.
 Prepare necessary accounts in the books of
Rama and Krishna.

CCP402.24 11
 In the Books of Rama
Joint Venture Account
Dr Cr
Rs. Rs.

To Purchases 10,000 By Krishna a/c 25,000

(sales)
To Bank a/c 500
“ Krishna a/c 8,400
(8000+400)
“ Krishna a/c 1,250
(Com)
(25000*5/100)
“ Profit:
Krishna (2/5) 1,940
“ Profit and Loss 2,910
a/c (3/5)
25,000 25,000
CCP402.24 12
 Krishna Account
Dr Cr
Rs. Rs.

To Joint Venture 15,000 By Joint 8,400

a/c (Sales) Venture a/c
“ Joint
Venture a/c
Comm 1,250

Profit 1,940

By Bank a/c 13,410

25,000 25,000

CCP402.24 13
 In the Books of Krishna
Joint Venture Account
Dr Cr
Rs. Rs.

To Rama a/c 10,500 By Bank a/c 25,000

(sales)
To Purchases a/c 8,000
To Bank a/c 400

To Commission a/c 1,250

“ Profit:
Rama (3/5) 2,910
“ Profit and Loss 1,940
a/c (2/5)
25,000 25,000
CCP402.24 14
 Krishna Account
Dr Cr
Rs. Rs.

To Bank a/c 13,410 By Joint 10,500

Venture a/c
“ Joint 2,910
Venture a/c
13,410 13,410

CCP402.24 15
Assignment

Sai bought goods worth Rs.1,500 and consigned to Prasad

on a Joint Venture profits being divisible equally. He paid
carriage and freight Rs.90 and drew on Prasad a bill for
Rs.600 on account and discounted the bill for Rs.588. On
receipt of goods Prasad paid carriage Rs.30, Insurance
Rs.40.
Sai received Account Sales showing that the goods realised
Gross Rs.2,550 and a Demand Draft for the amount due.
Pass Journal entries and prepare necessary Ledger
Accounts of both parties.

CCP402.24 16