Entry for receiving goods in Joint Venture.

kajal agarwal

In joint venture problem 

    - A and B enter into joint venture sharing profit and loss in the ratio 3/5th and 2/5th respectively. Ais to purchase timber in madyapradesh and forward it to B in delhi .  Apurchases timber worth 10,000 and pays 1.000 as exp. B received the consigned and immediately accepted A's draft for 8,000 . A gets discounted for 7850.

sir wat dose it mean and wat is the entry for this in joint venture

{ B received the consigned and immediately accepted A's draft for 8,000 . A gets discounted for 7850.}



asked Feb 27, 2014 in Joint Ventures by anonymous 329 views

1 Answer

0 votes
This means the goods which A consigned to B were received by B in Delhi.  A had sent a Bill of Exchange alongwith the consignment which B accepted and sent the bill back.  A got it discounted from his bankers. Since A had paid for the timber so he must have requested to give him Rs.8000, for which he accepted the BE.  Journal entry for this will depend on the method being followed to maintain the accounts of Joint Venture.  Commonly four methods are followed as given below:

1. Separate Set of Books for Joint Venture.

2. Recording of Joint Venture Transactions in any one of the Co-Venturer's books.            

3. Recording of Joint Venture Transactions in all the Co-Venturers' books.

4. Recording of the Joint Venture Transacton relating to each Co-Venturers in his own books.  In this case each co-venturer records only transactiosns relating to him in his books and to find out profit/loss on joint venture, they prepare Memorandum Joint Venture Account

So now you please tell which method of keeping of books of accounts is being followed, so that I could tell you the appropriate entries.
answered Feb 27, 2014 by jbsclasses (3,971 points)
Sir it is given that prepare ledger accounts in books of A and B
This is the third method where every co-venturer keeps account of joint venture in his books.  Each co-venturer maintains a Joint Venture A/c which is a nominal account and also other co-venturers'  account.
Entries in books of A:
Joint Venture A/c Dr. 10000
   To Bank                                        10000
Joint Venture A/c Dr.   1000
    To Bank                                         1000
No entry for sending the goods.
Bill Receivable A/c Dr. 8000
    To B                                                8000
Bank A/c                                      Dr. 7850
Joint Venture A/c                        Dr.    150
    To Bills Receivable A/c                                                   8000

Books of B
Joint Venture A/c           Dr.11000
   To A's A/c                                             11000
A's A/c                            Dr.  8000
   To Bills Payable A/c                              8000
Joint Venture A/c           Dr.    150
    To A's A/c                                                 150