Joint Venture: Practical Problems 🧮
Let's solve a problem using the Memorandum Joint Venture Method.
Problem 📝
A and B enter into a Joint Venture sharing profits equally.
- A bought goods for ₹50,000 and paid expenses ₹2,000.
- B bought goods for ₹30,000 and paid expenses ₹1,000.
- A sold goods for ₹60,000.
- B sold goods for ₹40,000.
- B took over remaining stock for ₹5,000.
Prepare Memorandum JV A/c and Find Profit.
Solution 📊
Memorandum Joint Venture Account
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Cost of Goods (A) | 50,000 | By Sales (A) | 60,000 |
| To Expenses (A) | 2,000 | By Sales (B) | 40,000 |
| To Cost of Goods (B) | 30,000 | By Stock Taken (B) | 5,000 |
| To Expenses (B) | 1,000 | ||
| To Net Profit | 22,000 | ||
| (Shared 11k : 11k) | |||
| Total | 1,05,000 | Total | 1,05,000 |
Distribution:
- A's Share = 11,000.
- B's Share = 11,000.
Final Settlement Calculation 🧮
Who owes whom? Let's check A's Position.
A's Account (In his own mind):
- Receivable:
- Cost he paid: 50,000
- Exp he paid: 2,000
- Profit Share: 11,000
- Total Claims: 63,000
- Payable:
- Sales he collected: 60,000
- Net Balance: 63,000 (Claims) - 60,000 (Cash held) = +3,000.
- Result: A receives ₹3,000 from B.
(Check B's side: Claims 30k+1k+11k = 42k. Cash held 40k+5k stock = 45k. He has 3k extra. He pays A.)
🎉 UNIT III COMPLETE! You have mastered Joint Ventures. From Joint Bank to Memorandum Method.
Next epic: Unit IV: Accounts from Incomplete Records - Single Entry System! 🕵️♂️