Joint Venture © Concept of Joint Venture ‘oint venture is a short-term business undertaking jointly by two or more persons who share the profits and losses in an agreed ratio, Joint Venture is a temporary form of business organization, There are certain business activities or projects that mayinvolve higher risks; higher investments and even they demand multiple skills, In such cases, an individual person may not be able to master all resources. Hence two or more people having requisite skill sets come together to forma temporary partnership. This is called a Joint Venture ‘There is a Memorandum of Undertaking (MOU) signed forthis purpose. A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task: This task can be a new project or any other business activity. © Examples of Joint Venture ‘The business activities for which Joint Ventures (JV) are formed could be: i) Construction of dams, bridges, roads, ii) Buying & selling of goods for a particular season Producing a film iv) Purchasing land selling plots etc, © Features of Joint Venture ‘The basic features of a Joint Venture business are i) Itis done for a specific purpose and hence has a limited duration. ii) The partners are called co-venturers ‘The profit or loss on joint venture is shared between the co-venturers in the agreed ratio, iv) The co-venturers may or may not contribute initial capital v) The joint venture is dissolved once the purpose of the business is over vi) The accounts of the co-venturers are settled immediately on dissolution, vii) A joint venture has no name. © Difference between Joint Venture and Consigament ‘The following are differences between Joint Venture and Partnership ‘The Institute of Cost Accountants of IndiaPoint of Relation between _Relation is that of owners, Relation is that of the principal and the agent parties. 2 Methods of keeping There are multiple methods of There is only one method of keeping accounts. accounts, keeping accounts 3 Ownership of goods Ownership is that of co- Ownership remains with the consignor though venturers. possession of goods passes from the consignor to theconsignee. 4 Profiteamed Profit belongs to the co- Profit belongs to the consignor and not to the venturers. consignee 5 Management ‘The co-venturers enjoy full The consignee being an agent has no powers powers to manage the business except that he has simply to obey instructions & contribute funds for the ofhis principal business. 6 Finance Money is contributed by all co- All money is invested by the consignor ‘enturers in acertain proportion 7 Risk Risk is shared between. Sales are made at consignor’s risk venturers, © Difference between Joint Venture and Pat ship ‘The following are differences between Joint Venture and Partnership, Itis carried on with out afirm’s It is carried on with firm’s name, name. Parties are called co-venturers, Parties are called partners, It is a temporary partnership Continuous and does not end after the and comes to an end afier the completion ofa particular venture, completion of a particular venture, 4 Liability Liability islimitedtotheadventure Liability is unlimited to the extent of their concerned for which they agree to business and private estate, contribute capital and share profits or losses. 5 Location of Itis generally local ‘Temay be located at different places. Business 6 Positionofa Minor In it, minor is generally not A minor, can be admitted only for benefits, admitted 7 Application of the No enactment is applicable. ‘Indian Partnership Act, 1952 is applicable Act 8 No.of Partners/ “There is no limit in it ‘tis limited to 20 in ordinary trade and 1 Members, ‘banking business, The Institute of Cost Accountants of Indiart meen Bi recoec Accounting of Joint Venture ‘There are different methods of recording joint venture transactions. They can be broadly classified into two following methods: 1 When separate set of books are maintained IL, When separate set of books are not maintained. Method I: When separate set of books are maintained As the business duration is short, the books of accounts are not very camprehensive. The basic purpose is to knowprofit or loss on account ofthe joint venture. Therefore, under this approach, only three accountsare maintained: a) b) 9 Joint Venture Account: It is similar to a Profit& Loss A/c. a “Joint Venture A/c” is opened which records all transactions related to theactivities carried out. In this account, in the debit side all expenses(paid personally by the co-venturers or out of join bank) irrespective of its nature (i.e, capital or revenue) are recorded. In the credit side, all sales (to outsiders as well as to the co-venturers) are recorded. The net result of this account will be either profit or loss. Joint Bank Account: A “Joint Bank A/c” is maintained to record all cash/bank transactions. This could take a form of cash book withcash and bank column, It will record, the initial contributions made by each co- venturer, proceeds of sales,expenses and distribution of net balances among co-venturers on dissolution of the venture All cash inflows are recorded in the debit side and the outflows are recorded in the credit side, Final settlement of the co-venturersis lastly put into this account so that it tallies. Co-venturers Account:Co-Venturers’ personal A/es are maintained to record transactions related 10 co- venturers, At the end ofthe joint venture, the balance of these accounts represents the the claim of aco-venture to/from the business which is ultimately settled through Joint Bank A/c ‘The accounting entries are normally as follows: SS Contribution of co-venturers Joint Bank Ale To,Co-Venturers Ale ‘Goods sent by co-venturer out of his own stock Joint Venture Ale De To, Co -Venturers Ale Expenses paid by co-venturers Joint Venture Ale Dr. To, Co -Venturers Ale “Materials purchase dout of joint venture funds Joint Venture Ale Dr. To Joint Bank Ale For expenses out of joint bankA/c Joint Venture Ale Dr. To Joint Bank Ale For goods sold for cash Joint Bank A/e Dr. To Joint Venture A/c Contract / sale price received in form of shares / cash Joint Bank A/c De Shares A/e De To Joint Venture Ale The Institute of Cost Accountants of India8 Commission / salary to co-venturers. Joint Venture Ale Dr To Co-Venturers Ale ‘9 Unsold goods taken over by co-venturers Co-Venturers Ale Dr To Joint Venture A/e 10. Shares taken over by co-venturers Co-Venturers Ale Dr. To Shares Ave 11 If shares are sold in open market Joint Bank A‘e Dr. To Shares Ale 12. For profit on joint venture Joint Venture Ale Dr To Co -Venturers Ale 13 For loss on joint venture Co-Venturers Ale Dr. To JointVentureA/e 14 For final distribution of funds. Co-Venturers Ale Dr To Joint Bank A/c Consider the following illustration Mlustration 12, Aditya and Amit entered into a joint venture to buy and sale Ganesh idols for the Ganesh festival. They opened a Joint Bank Account. Aditya deposited 82,00,000 and Amit 81,50,000. Aditya supplied Ganesh idols worth 825,000 and Amit supplied decoration material worth 715,000. The following payments were made by the venture a) Cost of Ganesh idols purchased %2,50,000 b) Transportation charges %12,000 ©) Advertising 27,500 and Sundry Expenses 2,500. They sold idols for 84,00,000 for cash. Aditya took over some idols for 830,000 and Amit took over remaining for 810,000. The profit or losses were to be shared equally between co-venturers, Prepare Joint Venture Account, Joint Bank Account and each Co-Venturer’s Account Solutio Joint Venture Account Cr. To Aditya Alc (Materials) 25,000 By Joint Bank A/e~ Sales -4,00,000 To Amit A/e (Materials) 15,000. By Aditya Ale 30,000 To Joint Bank A/c (Materials Purchased) 250,000 By Amit A/c 10,000 To Joint Bank A/c (Transport) 12,000 To Joint Bank A/c (Advertising) 7,500 To Joint Bank A/e (Sundry Exp.) 2,500 To Profit on Venture Ale Aditya 64,000 Amit 64,000 440,000 -4,40,000 The Institute of Cost Accountants of India oeSere cote Joint Bank Account Dr, Cr. a a a ‘To Aditya Ale (Contribution) 2,00,000 By Joint Venture A/c : (Material purchase) 2,50,000 To Amit A/c (Contribution) 1,50,000 By Joint Venture A’c (Transport) 12,000 To doint venture Ale (Sales) 4,00,000 By Joint Venture Ave ; (Advertising) 17,500 By Joint Venture Ave: (Sundry) 2,500 By Aditya A/e : (Closing) 259,000 By Amit Ale: (Closing) 2,19,000 780,000 7,80,000 Aditya’s Account Dr. Cr. To Joint Venture A/e ~ (materials) 30,000 By, Joint Bank 2,00,000 To Joint Bank A/c ~ (closing) 2,59,000 By, Joint Venture ~ (materials) 25,000 By, Joint Venture ~ (profit) 64,000 2,89,000 2,89,000 Amit’s Account Dr. cr SL To Joint Venture A /e — (materials) 10,000. By, Joint Bank 1,50,000 To Joint Bank A/c ~(closing) 2,19,000 By, Joint Venture A/c — (materials) 15,000 By, Joint Venture Ale ~ (profit) 64,000 2,29,000, 2,29,000 Mlustration 13. Prabir and Mihir doing business separately as building contractors undertake jointly to build a skyscraper for a newly started public limited company for a contract price of 81 ,00,00,000 payable as %80,00,000 in cash and the balance by way of fully paid equity shares of the new company. A Bank Account was opened for this purpose in ‘which Prabir paid 825,00,000 and Mihir 815,00,000, The profit sharing ratio was agreed as 2:1 between Prabir and Mihir. ‘The transactions were (a) Advance received from the company %50,00,000 (b) Wages to contractors %10,00,000 (©) Bought materials %60,00,000 (4) Material supplied by Prabir 210,00,000. The Institute of Cost Accountanis of India(@) Material supplied by Mihir 215,00,000 (Architect's fees paid from Joint Bank Account %21,00,000 ‘The contract was completed and the price was duly paid. The joint venture was duly closed by Prabir taking all the shares at 218,00,000 and Mihir taking over the balance material for ®3,00,000. Prepare the Joint Venture Account, Joint Bank Account. Co-venturer’s Accounts and Shares Account. Solution: Joint Venture Account Dr. Ce SEE ha Ee To, Joint Bank Alc ~( wages) 10,00,000 By, Joint Bank A/e — (advance) 50,00,000 To, Joint Bank A/c (materials) {60,00,000 By, Joint Bank Ale — (balance) price 30,00,000 To, Joint Banks Ale ~ (Architect) 21,00,000 By, Shares A/c ~ (received) 20,00,000 To, Prabir Ale ~ (materials) 10,00,000 By, Mihir A/c — (stock taken) 3,00,000 To, Mihir Ale — (materials) 15,00,000 By, Prabir A/e — (2/3rd loss) 10,00,000 To, Shares Ae ~ (loss) 2,00,000. By, Mihir A/e ~ (1,3rd loss) 5,00,000 1518,00,000 1,18,00,000 Joint Bank Account Dr. Cr. a To, Prabir Ale 25,00,000 By, Joint Venture A/c -( wages) 10,00,000 To, Mihir A/e 15,00,000 By, Joint Venture A/e ~ (materials) 60,00,000 To, Joint Venture A/c (advance) 50,00,000 By, Joint Venture A/c ~ (Architect) 21,00,000 To, Joint Venture A/c (balance) 30,00,000 By, Prabir A/c ~ (balance paid) 7,00,000, By, Mihir A/c — (balance paid) +22,00,000 1,20,00,000 1,20,00,000 Prabir’s Account Dr. Cr. a To, Shares A/e — (taken) 18,00,000 By, Joint Bank A/e 25,00,000 To, Joint Venture A/c — (loss) 10,00,000 By, Joint Venture A/c-(material) 10,00,000 ‘To, Joint Bank A/c ~{(balance paid) -7,00,000 35,00,000 35,00,000, The Institute of Cast Accountants of IndiaMihir's Account es Ge a To, Joint Venture A/c{stock taken) 3,00,000 By, Joint Bank A/c 15,00,000 a aa VORTEC aap PIS VSS SE Geo IRS TO ase EAC Sa EO 30,00,000 30,00,000, me e A To, Joint Venture A/c 20,00,000 By, Prabir A/c 18,00,000 By, Joint Venture A/c — (loss) 2,00,000 aa Tabs Method I: When no Separate Books of Accounts are Maintained ‘The co-venturers may decide not to keep separate books of account for the venture if itis for a very short periodof time. In this case, all co-venturers will have account for the transactions in their own books. Here no Joint BankAccount is opened and the co-venturers do not contribute in cash. Goods are supplied by them from out of theirstocks and expenses for the venture are also met by them, Each co-venturer will prepare a Joint Venture A/e andthe other Co-Venturer’s A/c in his books, Naturally, the profit or loss is separately calculated by each co- venturer Each co-venturer will take into A/c all transactions i.e, done by himself and by his co-venturer as well. ‘This method, again, has two versions as follows a) When each co-venturer keeps record of all transactions ‘Under this approach, each co-venturer will prepare a Joint Venture Ave and the other Co-Venturer’s A/e in his books. Here, the profit or loss is separately calculated by each co-venturer. Each co-venturer will take into A/c all ‘transactions ie., done by himself as well as by his co-venturer. ‘The accounting entries are as follows: When good sare supplied and expenses paid by A ene VuEOREDS Ty SECA To, Goods A/c To, A’s Ave To, Cash / Bank Ale When goods are supplied by B and expenses paid by B Joint Venture A/c Dr. Joint Venture A/c Dr. To, B’s Ale To, Goods Ale To, Cash / Bank A/c stitute of Cost Accountants of India‘When advance is given by A to B or bill accepted by A B’s Ale Dr Cash / Bank A/eDr To, Cash / Bank A/c B/R AlcDr. To,B/P Ale To, A's Ale ‘When sale proceeds are received by A Cash / Bank Ave Dr Avs Ale Dr. To, Joint Venture Ale To, Joint Venture Ale When sale proceeds are received by B Bs Ale Dr Cash / Bank Ale Dr To, Joint Venture Ale To, Joint Venture Ale For unsold goods taken over by A Goods Ale Dr A’sAle Dr To Joint Venture Ale To Joint Venture Ale For unsold goods taken over by B B’s Ale Dr Goods Ale Dr To, Joint Venture Ale To, Joint Venture A/c For profit on joint venture business Joint Venture Ale Dr. Joint Venture Ale Dr. To, B'sAle To, A’sAle To, PRL Ale To, P&L Ale For loss on joint venture business B’s Ale Dr A’s Ale Dr P& LAD. P&L AMD, To, Joint Venture Ale To, Joint Venture Ale Consider the following illustrations Mlustration 14, Ram, Mohan and Rahim were partners in a joint venture, each contributing 5,000. Ram purchased goods for 13,000 and also supplied goods worth 1,000 from his stock, Rahim also supplied gaods to the value of €1,500 ‘from stock and his expenses in connection with the supplying of goods on account of joint venture amounted to %50, Ram paid €250 for expenses in connection with the joint venture, There was a sale of €20,800 by Ram. Ram ‘was entitled to a commission of 5 per cent on sales, Unsold goods amounting to 2500 were taken over by Mohan Ram settled accounts of Mohan and Rahim by Bank draft Records these transactions in Ram’s journal and also prepare Joint venture account and Rohan and Rahim accounts in Ram’s books. The Institute of Cost Accountants of Indiaeee rns Solution: ‘Bank A/c Dr. 10,000 To Mohan A/c 5,000 To Rahim A/o 5,000 (Being amount received from Mohan and Rahim for joint venture) Joint Venture A/e Dr. 13,000 To Bank Ale 13,000 (Being goods purchased on account of joint venture) Joint Venture Ale Dr 4,000 ‘To Goods A/e 1,000 (Being goods supplied out of stock for joint venture) Joint Venture A/e De 1,550 To Rahim Alo 1,550 (Being goods for & 1,500 supplied for joint venture and expenses & 50 incurred by Rahim) Joint Venture Ale Dr 250 To Bank Alc 250 (Begin expenses incurred in connection with joint venture) Bank Ale Dr. 20,800 To Joint Venture Ale 20,800 (Being goods sold on account of joint venture) Joint Venture Ale Dr 4,040 To Commission A/e 1,040 (Being 5% commission on sale of € 20,800 on account of joint venture) Mohan Ale Dr. 500 To Joint Venture Ale 500 (Being unsold goods taken by Mohan) Joint Venture Ale Dr. 4,460 To Profit and Loss Ale 1,486 To Mohan Ale 1,487 To Rahim Ale 1,487 (Being profit on joint venture transferred) ‘Mohan Ale Dr 5,987 Rahim Ale Dr 8,037 To Bank Alc (Being amount remitted to mohan and rahim in settlement oftheir accounts) 14,024 The Institute of Cost Accountants of IndiaJoint Venture Account Dr. Cr. a To Bank Account (purchase) 13,000 By Bank Account (Sale) 20,800 To Goods Account (Goods Supplied) 1,000 By Mohan (unsold goods 500, taken) To Rahim (goods and expenses) 1,550 PEI 9 To Commission Account (5%) 1,040 To Profit on joint venture transferred to: Profit & Loss Account T1486, ‘Mohan: U1 487, ‘Rahim T1487 4,460 21,300 21,300 Bik hee oe ee ® ay rial ORES oe 5,987 By Joint Venture Account 1,487 (profit) an cl abi Account ne es To Bank Account 8,037 By Bank Account 5,000 By Joint Venture Account 1,550 By Joint Venture Account 1,487 (profit) Te TE Mlustration 15, John and Smith entered into a joint venture business to buy and sale garments to share profits or losses in the ratio of 5:3. Johm supplied 400 bales of shirting at %500 each and also paid 818,000 as carriage & insurance. Smith supplied $00 bales of suiting at %480 each and paid 222,000 as advertisement & carriage. John paid €50,000 as advance to Smith. John sold 500 bales of suiting at 2600 each for cash and also all 400 bales of shirting at %650 each for cash, John is entitles for commission of 2.5% on total sales plus an allowance of €2,000 for looking after business. The joint venture was closed and the claims were settled. Prepare Joint Venture Account and Smith's Account in the books of John and John’s Account in the books of Smith, The Insitute of Cost Accountants of IndiaFundamentals of Financial and Cost Solution: Books of Jol Joint Venture Account in é a To, Goods A/c = shirting (400*500) 200,000 By, Cash A/c ~ sales To, Bank A/c - carriage & insurance 18,000. shirting (500 = 600) 3,00,000, To, Smith A/c - suiting (500*480) 2,40,000 suiting (400 « 650) 2,60,000 To, Smith A/c - Advt & Carriage 22,000 To, Commission A/c - 2.5% 14,000, To, Allowance Ale 2,000 ‘To, P& L Ale (5/8th share) 40,000 Ta zs 5,60,000 $,60,000 Smi ‘Account fn, a Gat Ai Estee 00 Bel eee 2 Tas Ca Ales pold PSD (SE Vea ACESS am By, Joint Venture A/c - profit 24,000, 2,986,000 2,86,000 Books of Smith John’s Account cy Cr. a To, Joint Venture A/c — sales 5,60,000 By, Cash Ale — advance 50,000 By, Joint Venture A/c ~ shirting ,00,000, By, Joint Venture A/c ~ expenses 18,000 By, Joint Venture A/c - commission 14,000 By, Joint Venture Ale ~ allowance 2,000 By, Joint Venture Ale ~ profit 40,000 By, Cash A/e - balance paid 2,36,000 5,602,000 '$,60,000 The Institute of Cost Accountants of Indiab) Memorandum Joint Venture Account Here each Co-Venturer records only those joint venture transaetionswhich are affected by him with the help of (Name ofthe other Co-Venturer)... debited with the amount of purchases/supplies made and expensesincurred by the Co-Venturer. Each Co-Venturer sends a periodic statement of joint venture transactions effectedby him only, to the other Co-Venturer and on receipt of the aforesaid statement, each Co-Venturer preparesMemorandum Joint Venture Account in order to ascertain the profit/loss on Joint Venture transactions, Since thisaccount is in fact, not a part and parcel of double a personal account designed as “Joint Venture with entry system the word ‘memorandum’ is prefixed. ‘The accounting entries are as follows: 1. (a) On receipt of any amount / Bills Receivable from other Co-Venturer: Cash / Bank / Bills Receivable Ale To, Joint Venture with 0... Ale 1. (b) On discounting Bills Receivable: Bank Alc Joint Venture with Ale To, Bills Receivable A/c 2. On purchase of goods Joint Venture with AZe To, Cash / Bank Ale To, Supplier's Ale 3. On making payment to supplier Supplier's Ale To, Cash / Bank / Bills Payable Ale To, Joint Wenture with Ave eb Amal aot Ronis Ou ae OWE OS Joint Venture with Ale To, Purchases / Goodssenton Joint Venture A/e 5. On payment of expenses Joint Venture with, Ale To, Cash / Bank Ale To, Creditor’s Ale 6. On sale of goods: Cash Bank Ale Customer's Ale To, Joint Wenture with Alc 7, On receiving payment from a customer: Cash / Bank Ale Joint Wenture with Ale To, Customer’s Ale The Institute of Cost Accountants of India Dr. Dr. Dr. Dr. Dr, Dr. Dr. (with net proceeds) (with discount) (ith total) (with total) (with eash purchase) (with credit purchase) (with total) (with payment made) (with discount received) (if supplies at cost) (Gf supplies at posit (with total) (with cash expenses) (with outstanding expenses) (with cash sales) (with eredit sales) (with total) (with the payment received) (Giscount allowed / baddebt) (with the payment received) Account”. It isFundamentals of Fin: 8. On taking away of unsold good: Goods Sent on Joint Venture Ale De To, Joint Venture with Ale 9. On considering some commission /salary to the Co-Venturer: Joint Venture with A/c Dr. To, Commission / Salary Ale 10. On recording the share of Profit / Loss (a) When profit Joint Venture with Ale Dr. To, Profit &Loss Ale (b) When loss- Profit & Loss Ale Dr. To, Joint Venture with Ale 11, On settlement of balance of Joint Venture with A/c: (a) When there is a debit balance: Cash / Bank A/c Dr, To, Joint Venture with Ale (b) When there is a credit balance: Joint Venture with Ale Dr. To, Cash / Bank Ale Ilusteation 16, Bharat and Sujit joined together as co-ventures for equal share in profits through sale of television cabinets. On. March 31, 2021. Bharat purchased 2,000 cabinets at ¥1,250 each for cash and sent 1,500 of these to suit for sale, the selling price of each being %1,300, All the cabinets were sold by April 30, 2021 by both and the proceeds collected. Each venturer recorded in his books only those transactions concluded by him, final profit and loss being ascertained through a Memorandum joint venture Account ‘The expenses met by the venturer were: Bharat: Freight and insurance 12,000 Selling expenses 5,000 Sujit: Clearing charges 1,000 Selling expenses 12,000 Final settlement between the venturers took place on May 31, 2021. You are required to show: The Institute of Cost Accountanis of India,a) Joint Venture with Sujit A/c in the books of Bharat ) Joint Venture with Bharat A/c in the baoks of Sujit, and ©) Memorandum Joint Venture Account Solution: Bharat’s books Joint Venture with Sujit Account Pr eo To Purchases -2,000 television 25,00,000 2021 By Cash-sale proceeds of —_6,50,000 Ra 31. cabinets @ 1,250 April, 500 @ cabinets & 1,300 30 each April, To Cash — expenses: Freight & 12,000 May By Cash (settlement of 19,02,000 30 Insurance 31 accounts) Selling Expenses 5,000 May 31 To Profit & Loss Account ¥ 35,000 share of profit 25,52,000 25,52,000 Sujit’s books Joint Venture with Bharat Account A To Cash ~ expenses: 2021 By Cash- sale proceeds of 19,50,000 Mar 31 Clearing charges April 30 1,500 cabinets at 1,300 each Selling expenses 12,000 May 31 To Profit & Loss A/e 35,000 ¥% share of profit May 31 To Cash (settlement) 19,02,000 19,50,000 19,50,000 Memorandum Joint Venture Account Dr. Cr Powe [pasate TD tae | parses [| Sea pe resees ear Sa ES ‘Mar 31 Television cabinets at 21,250 each 5.00,000 April 30 Bharat 6,50,000 The Institute of Cost Accountants of IndiaFundamentals of Fin: Peon April30 To Expenses: Suit 19,50,000 Bharat (12,000 + $,000) 17,000 ‘Sujit (1,000 + 12,000) 13,000 May 31 To Net profit: Bharat (1/2) 35,000 Sujit (1/2) 35,000 70,000 26,00,000 26,00,000 Mustration 17, M and N decided to work in partnership with the following scheme, agreeing to share profits as under M—%th share N— “th share ‘They guaranteed the subscription at par of 10,00,000 shares of 81 each in U Ltd. And to pay all expenses up to allotment in consideration of U Lid. issuing to them 50,000 other shares of 1 each fully paid together with a ‘commission @ $% in cash which will be taken by M and N in3 : 2. M and N introduced cash as follows: @ M- Stamp Charges, ete., 4,000 Advertising Charges 3,000 Printing Charges 3,000 N-Rent 2,000 Solicitor's Charges 3,000 Application fell short of the 10,00,000 shares by 30,000 shares and N introduced %30,000 for the purchase of those shares. The guarantee having been fulfilled, U Lid. handed over to the venturers $0,000 shares and also paid the commission in cash. All their holdings were subsequently sold by the venturer N receiving 218,000 and M 50,000. Write-up necessary accounts in the books of both the partes on the presumption that Memorandum Joint Venture Account is opened for the purpose. ‘Memorandum Joint Venture Account Cr. ai A To, N: Cost or Shares 30,000 By M: Commission (3/5 ) 30,000 To, M: Stamp Charges ete, 4,000 'N: Commission (2/5) 20,000 Advertising Charges 3,000 By M: Sale Proceeds 50,000 Printing Charges 3,000 10,000 N- Sale Proceeds 18,000 To, N: Rent 2,000 Solicitor’s Charges 3,000 5,000 The Institute of Cost Accountants of India,To, Profit on Venture : ToM—% 54,750 ToN—% 18,250. 73,000 1,18,000 1,18,000 In the books of M Jett Ventre ith ws, & EE Ee _ See Sn re SIaTOAl 37s (Bf TSS SE a ‘To, Bank (Remittance) 15,250 80,000 80,000 In the books of N Joint Venture with M i x a To, Bank : Cost of Shares 30,000 By, Bank : Commission: 20,000 To, Bank : Rent and Solicitor’s Charges 5,000 By, Bank : Sale Proceeds: 18,000 To, Share of Profit 18,250 By, Bank (Remittance) 15,250 53,250 53,250 The Ista of Cost Accoutans of nda al