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 : PPTs & Animation

CCP402.30 1
Objectives

On Completion of this Period, you would be able

to Solve different problems on Joint Venture
separate set of Books (Joint Bank method)

CCP402.30 2
 Illustration 1

1. Shah and Desai undertake the making of a film

for the Government for a payment of Rs.
1,50,000. For this purpose Shah contributes Rs.
30,000 and Desai contributes Rs. 25,000.
These amounts were deposited in a
Joint Bank Account. The following expenditure
was made: -
Rs.
On wages 40,000
On materials 25,000
On camera 5,000
CCP402.30 3
Illustration 1 contd.

These payments were made out of the Bank

Account but, in addition, Shah supplied sets which
were valued at Rs. 5,000. The film was made but,
due to certain defects, the Government deducted
Rs.30,000 from the payment which was made
gradually. The camera was taken over by Desai at
Rs. 2,000 and the sets were taken back by Shah
at a value of Rs. 1,000.
Prepare the necessary accounts in the
books of Joint Venture.

CCP402.30 4
 Solution

Dr Joint Venture Account Cr

Rs Rs
To Joint Bank a/c By Joint Bank a/c
Wages 40,000 1,20,000
“ Desai-Camera 2,000
Materials 25,000 “ Shah-sets 1,000
Camera 5,000
“ Shah-sets 5,000
“ Profit transferred to:
Shah : 24,000
Desai : 24,000 48,000
1,23,000 1,23,000

CCP402.30 5
Dr Joint Bank Account Cr
Rs Rs
To Shah a/c 30,000 By J.V.a/c
“ Desai a/c 25,000 wages 40,000
“ Joint Venture a/c Materials 25,000
1,20,000
Camera 5,000
“ Shah a/c 58,000
““ Desai a/c 47,000
1,75,000 1,75,000

CCP402.30 6
Dr Desai Account Cr
Rs Rs

To J.V a/c (sets) 1,000 By Joint Bank a/c 30,000

“ Joint Bank a/c 58,000 “ J.V. a/c (sets) 5,000

“ “ (Profit) 24,000

59,000 59,000

CCP402.30 7
Dr Desai Account Cr

Rs Rs

To J.V. a/c By Joint Bank a/c 25,000

Camera 2,000 “ J.V. a/c

“ Joint Bank a/c 47,000 Profit 24,000

49,000 49,000

CCP402.30 8
 Illustration 2

1. Sachin and Laxman undertook jointly to construct

a building for a newly started joint stock company
for a contract price of Rs. 2,00,000 payable as to
Rs. 1,50,000 in cash and Rs. 50,000 in fully paid
shares of the new company. A joint bank account
has been opened in their joint names, Sachin
paying in Rs. 50,000 and Laxman Rs. 30,000.
They are to share profit or loss in the proportion of
5/8 and 3/8 respectively. Their transactions were
as follows:
CCP402.30 9
Illustration 2 contd.

wages paid 80,000

Materials purchased 1,00,000
Materials supplied by Sachin 6,000
Materials supplied by Laxman 2,000
Architect’s fees paid by Sachin 2,000

CCP402.30 10
Illustration 2 contd.

The contract was completed and the price duly

received. The joint venture account was closed
by Sachin taking up all the shares at an agreed
price of Rs. 45,000 and Laxman taking up the
stock of materials at an agreed price of Rs.
5,000.

Show the necessary ledger accounts in the

books of Joint Venture.

CCP402.30 11
Solution

Joint Venture Account

Dr. Cr.
To Joint Bank a/c By Joint Bank a/c 1,50,000
Wages 80,000 " Shares a/c 50000
Materials 1,00,000 " Laxman a/c 5000
" Sachin a/c 6,000
" Laxman a/c 2,000
" Sachin a/c 2,000
" Shares a/c (Loss) 5,000
" Profit to :
Sachin (5/8) 6,250
Laxman (3/8) 3,750
205,000 205,000

CCP402.30 12
 Joint Bank Account
Dr. Cr.
To Sachin a/c 50,000 By Joint Venture a/c
" Laxman a/c 30,000 Wages 80,000
" Joint Venture a/c 1,50,000 Materials 1,00,000
" Sachin a/c 19,250
" Laxman a/c 30,750
2,30,000 2,30,000

CCP402.30 13
 Sachin Account
Dr. Cr.
To Shares a/c 45,000 By Joint Bank a/c 50,000
" Joint Bank a/c 19,250 " Joint Venture a/c 6,000
" Joint Venture a/c 2,000
" Joint Venture a/c
(profit) 6,250
64,250 64,250

CCP402.30
CCP-302-30 14 14
 Laxman Account
Dr. Cr.
To Joint Venture a/c 5,000 By Joint Bank a/c 30,000
" Joint Bank a/c 30,750 " Joint Venture a/c 2,000
" Joint Venture a/c 3,750
35,750 35,750

CCP402.30
CCP-302-30 15 15
 Shares Account
Dr. Cr.
To Joint Venture a/c 50,000 By Sachin a/c 45,000
By Joint Venture a/c
(Loss) 5,000
50,000 50,000

CCP402.30 16
Frequently Asked Questions

1. What is Joint Venture?

2. List out the main Features of Joint Venture
3. What are the different types of business
undertaken by Joint Venture?
4. What are the advantages of Joint Venture?
5. What are the differences between Joint venture
& Partnership

CCP402.30 17
 Frequently Asked Questions contd.

1. What are the differences between Joint venture

and Consignment?
2. Explain briefly Joint Venture a/c
3. Prepare specimen Joint Venture a/c with
imaginary figures
4. What are the different methods of maintaining
Joint venture accounts

CCP402.30 18
 Frequently Asked Questions contd.

1. Explain the procedure of maintaining accounts

by one coventurer
2. Explain the procedure of maintaining account
by all covernturer
3. Explain the procedure of maintaining separate
set of Books in Joint venture

CCP402.30 19