JOINT VENTURE · 2019-12-15 · JOINT VENTURE 1. A and B entered into joint venture agreeing to share profits and losses in the ratio of 2: 1. The following transactions took place

JOINT VENTURE

1. A and B entered into joint venture agreeing to share profits and losses inthe ratio of 2: 1. The following transactions took place during the courseof the venture :

A B

(a) Deposited into the Joint Bank ` 50,000 ` 25,000

(b) Goods brought in by ` 10,000 ` 5,000

(c) Expense incurred by ` 5,000 ` 2,500

(d) Joint Transactions (i) Goods bought-from X for ` 20,000 and issued acurrent dated cheque. Good purchased from Y on credit ` 40,000. (ii)Payment to Y by cheque in full settlement - ` 39,400 (iii) Expenses paid-`1,800, (iv) Goods sold to D for ` 40,000 and received a current datedcheque. Good sold to E on credit ` 50,000 for 3 months. (v) E accepteda Bill Receivable which was discounted @ 18% p.a (e) A agreed to takeover the balance of stock at an agreed valuation of ` 2,700. Pass thenecessary journal entries and prepare the necessary ledger accountsassuming that the final settlement between A and B was made by cheque.

2JOINT VENTURE 39

2. A entered into a Joint Venture with B. The following transactions took place during the courseof the venture.

Particulars A B Particulars A B

Cash sent by - 5,000 Expenses incurred by 7,300 3,650

Cash received by 5,000 - Goods sold by 70,000 20,000

Goods purchased by 40,000 20,000 Goods unsold taken

Goods brought in from away by 1,800 900

own stock 10,000 5,000

Required : (i) Pass the necessary journal entries and (ii) Prepare the necessary ledger accountsin the books of A assuming that final settlement between A and B was made by cheque.

3. A entered into a Joint Venture with B. The following transactions took place during the courseof the venture.

Particulars A B Particulars A B

Cash sent by - 5,000 Expenses incurred by 7,300 3,650

Cash received by 5,000 - Goods sold by 70,000 20,000

Goods purchased by 40,000 20,000 Goods unsold taken

Goods brought in from away by 1,800 900

own stock 10,000 5,000

Required : (i) Pass the necessary journal entries and (ii) Prepare the necessary ledger accountsin the books of A & B assuming that every Co-Venturer records the transactions in his ownbooks of account under Memorandum Method.

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40 FUNDAMENTALS OF ACCOUNTING (CPT)

CLASS WORK

1. A and B are in Joint Venture and keep the books in Memorandum Method. B supplied Goodsworth ` 50,000 from his own stock for Joint Venture. In the books of A which of the followingeffects shall be given :

A. Joint Venture A/c Dr. 50,000

To B’s A/c 50,000

B. Joint Venture with B A/c Dr. 50,000

To Goods sent for Joint Venture 50,000

C. Goods sent for Joint Venture A/c Dr. 50,000

To Joint venture with B A/c 50,000

D. None of the above.

2. A and B are in Joint Venture keeping seperate set of books for Joint Venture. A supplied Goodsworth ` 50,000 from his own stock for Joint Venture. Which of the following entry is correct.



B. Goods sent for Joint Venture A/c Dr. 50,000

To Joint Venture A/c 50,000

C. Joint Venture with B A/c Dr. 50,000


D. Joint Venture A/c Dr. 50,000

To A’s A/c 50,000

3. At the time of Final settlement on completion of Venture, in the books of A “Joint Venture withB A/c” shows a credit balance of ` 10,250. State which of the following statement is True :

A. The above stated balance represents share of profit of A.

B. The above stated balance represents amount due to B.

C. The above stated balance represents Net Profit of Joint Venture.

D. The above stated balance represents amount due from B.

4. A and B are in Joint Venture. As per agreement the transactions are to be recorded by A onlyin his own books. A and B are entitled to a commission of ` 5000 and ` 2500 respectively. Statewhich of the following entries is correct.


JOINT VENTURE 41

To A’s A/c 5,000

To B’s A/c 2,500

B. Joint Venture A/c Dr. 7,500

To Joint Bank A/c 7,500

C. Joint Venture A/c Dr. 7,500

To Commission A/c 5,000

To B’s A/c 2,500

D. Joint Venture A/c Dr. 7,500

To P & L A/c 5,000

To B’s A/c 2,500

5. A and B are in Joint Venture. Goods unsold worth ` 5000 and ` 2500 are taken over by A andB respectively. In a seperate books for Joint Venture which of the following entry will be made:

A. Goods sent per Joint Venture A/c Dr. 5,000

B’s A/c Dr. 2,500


B. A’s A/c Dr. 5000

Goods sent for Joint Venture A/c Dr. 2500


C. Goods sent for Joint Venture A/c Dr. 5,000

To Joint Venture with B 5,000

D. None of these.

6. Joint Venture Account in the books of B has a debit balance of ` 10,000. If B is in Joint Venturewith A which of the following entries is correct in the books of B :

A. Cash A/c Dr. 10,000

To Joint Venture with A A/c 10,000

B. Joint Venture with A A/c for Dr. 10,000

To Cash 10,000

C. Joint Venture A/c Dr. 10,000

To A’s A/c 5,000

To B’s A/c 5,000

D. None of these.


7. Mr. A purchased Goods worth ` 50,000 for Joint Venture out of these half the Goods he sent toB for sale. If A is in Joint Venture with B. Which of the following effect is true in books of B forsuch transfer of goods.A. It is a transfer of goods by one partner to another partner and so B will not give any effect.B. Joint Venture with A A/c for Dr. 25,000

To A’s A/c 25,000C. Joint Venture A/c Dr. 50,000

To A’s A/c 50,000To B’s A/c 5,000

D. Since Goods are purchased by A; effect will be given in books of A only.8. A and B enter in to Joint Venture to Consign goods to C for sale. A sends goods worth of `

50,000 from his personal stock on consignment to C. In a seperate set of books for Joint Venturewhich of following entry will be passed:A. Consignment A/c Dr. 50,000

To Goods sent on consignment 50,000B. Joint Venture A/c Dr. 50,000

To Goods sent on consignment 50,000C. Joint Venture A/c Dr. 50,000

To A 50,000D. Joint Venture A/c Dr. 50,000

To Goods sent for Joint Venture 50,0009. A and B enter into Joint Venture to Consign goods to C for sale on consignment basis. A

supplied Goods costing ` 40,000 from his personal stock to C at a selling price calculated at20% profit on sale. If they keep books in Memorandum method, A will pass which of followingentry for goods supplied:A. Joint Venture with B A/c Dr. 40,000

To Goods sent for Joint Venture 40,000B. Joint Venture with B A/c Dr. 50,000

To Goods sent for Joint Venture 50,000C. Joint Venture with B A/c Dr. 50,000

To Goods sent for Joint Venture 40,000To Stock Reserve 10,000

D. Joint Venture with B A/c Dr. 50,000

To Sales 50,000

JOINT VENTURE 43

10. A and B enter into Joint Venture and record the transactions under Memorandum method Bhad sold goods to one customer on credit out of which ` 20,000 could not be recovered fromcustomer and was to be written of as bad debt. Which of the following statement is true:

A. Mr. A only will pass following entry in his books :

Joint Venture with B A/c Dr. 20,000

To Debtors 20,000

B. Neither Mr.A nor Mr.B will pass any entry in their books but it will be only shown on debitside of Memorandum Joint Venture Account.

C. It will be shown on debit side of Memorandum Joint Venture A/c and B will also pass thefollowing entry :

Joint Venture with A A/c Dr. 20,000

To Debtors 20,000

D. None of these.

11. A and B are in Joint Venture and record their transactions under Memorandum Joint VentureAccount Method. For the purpose of sale B supplied Goods worth ` 50,000 from his personalstock to A Aftersome time A returned to B goods of ` 10,000 from the Goods received from B.In respect of such return of Goods by A to B which of the following statements is correct :

A. Goods returned will be shown on credit side of Memorandum Joint Venture Account.

B. This transaction will not be recorded at all in the books of either party.

C. Mr. A will pass following entry in his books.

Joint Venture with B A/c Dr. 10,000


D. None of the above.

12. A and B are in Joint Venture. A purchased goods of ` 1,00,000 at 10% trade discount and Bpurchased goods for ` 80,000. Out of these goods costing ` 15,000 was completely destroyedby Fire and goods costing ` 5,000 was distributed as free samples 2/3 of the remaining goodswere sold for ` 2,00,000. If they share profits & Losses in the ratio of 3 : 2 and agree to take overgoods, remaining unsold at half the average rate of Gross Profit on sales, in their P & L ratio.Value of goods taken over by A and B respectively is :

A. ` 30,000 and ` 20,000


B. ` 45000 and ` 30,000

C. ` 37,500 and ` 25,000

D. It is not possible to obtain answer from the data provided.

13. Which of the following statements is true:

(a) A Joint Venture has a definite life. (b) A Joint Venture has an indefinite life.

(c) A Joint Venture is a partnership (d) None of these

under the partnership act.

14. Which of the following statements is true:

(a) The Joint Venture can be formed (b) A legal deed should be drafted

by a single person only. before forming Joint Venture.

(c) The profit to be shared between the (d) Joint Venture follows going

venturers in agreed ratio. concern concept.

15. Which of the following statement is not true ?

(a) Joint venture is a going concern (b) Joint venture is terminable in nature

(c) Joint venture follow (d) The co-venturers shares the

accrual basis of accounting profit in agreed ratio.

16. Which of the following statements is true?

(a) There is no difference between (b) Consignment and Joint Venture is same

Joint Venture and Partnership

(c) In case of Joint Venture, none of (d) In case of Joint Venture, the number

the Act is applicable. of related party is one only.

17. Which of the following statements is true?

(a) Only one venturer bears the risk (b) Only one venturer can sell the goods

(c) Only one venturer can purchase (d) In joint venture, provisions of

the goods Partnership Act do not apply

18. Which of the following statement is not true?

(a) Joint Venture follows accrual basis (b) Joint venture is different from

JOINT VENTURE 45

of accounting but does not follow Partnership and Consignment.

going concern

(c) Co-venturers share the profit in (c) A Joint Venture legal deed is

agreed ratio. to be drafted before forming joint venture.

19. For opening Joint Bank account, in case of separate sets of books.

(a) Venture A/c is debited and (b) Joint Bank A/c is debited and

Venturers A/c is credited Venturer’s Capital A/c is credited

(c) Joint Venture A/c is debited and (d) Joint Bank A/c is debited and

Joint Bank A/c is credited Joint Venture A/c is credited.

20. For purchase of plant from Joint Bank Account, in case of separate sets of books:

(a) Plant A/c is debited and Joint (b) Joint Venture A/c is debited and

Bank A/c is credited Joint Bank A/c is credited

(c) Plant A/c is debited and Venturers’ (d) Joint Venture A/c is debited and

Capital A/c is credited. Plant A/c is credited

21. For purchase of Goods by a co-venturer in case of separate set of books:

(a) Goods A/c will be debited and (b) Joint Venture A/c will be debited and

Venturers’ Capital A/c will be credited. Joint Bank A/c will be credited.

(c) Venturer’s Capital A/c will be (d) Joint Venture A/c will be debited

debited and Joint Venture A/c and ventuer’s capital a/c will

will be credited. be credited.

22. For Goods supplied from own stock by a co-venturer in case of separate set of books:

(a) Goods A/c will be debited and (b) Joint Venture A/c will be debited and

Venturers’ Capital A/c will be credited. Joint Bank A/c will be credited.

(c) Venturer’s Capital A/c will be (d) Joint Venture A/c will be debited

debited and Joint Venture A/c will and ventuer’s capital a/c will be credited.

be credited.

23. For Stock of Goods taken over by a co-venturer in case of separate set of books:

(a) Goods A/c will be debited and (b) Joint Venture A/c will be debited

Venturers’ Capital A/c will be credited. and Joint Bank A/c will be credited.


(c) Venturer’s Capital A/c will be (d) Joint Venture A/c will be debited and

debited and Joint Venture A/c ventuer’s capital a/c will be credited.

will be credited

24. For Co-venturer’s Cash contribution in a separate set of books.

(a) Joint Bank A/c is debited and (b) Coventurers’ Capital A/c is debited

Joint Venture A/c is credited. and Joint Bank A/c is credited.

(c) Joint Venture A/c is debited and (d) Joint Bank A/c is debited and

Co-venturer’s Capital A/c is credited. Co-venturer’s Capital A/c is credited

25. If separate sets of books is maintained and suppliers grant discount at the time of making thepayment for purchase of goods, such discount received will be credited to;

(a) Joint Venture A/c (b) Joint Bank A/c

(c) Co-venturer’s Capital A/c (d) Suppliers’ A/c

26. For distribution of profit in a separate set of books:

(a) Joint Venture A/c is debited and (b) Profit & Loss A/c is debited and Joint

Profit & Loss A/c is credited. Venture A/c is credited

(c) Profit & Loss A/c is debited and (d) Joint Venture A/c is debited and

Coventurers’ Capital A/cs are credited. Coventurers’ Capital A/cs are credited

27. Which of the following is not true:

(a) Bad Debts are recorded in (b) Loss of Uninsured Goods is not

Joint Venture A/c recorded in Joint Venture A/c

(c) Discount charges on discounting a (d) Cash Discount received from suppliers

B/R drawn upon a customer are of goods is recorded in Joint

not recorded in Joint Venture A/c Venture A/c

28. In Memorandum Joint Venture Account Method, each Co-venturer records —

(a) all the joint venture transactions (b) common joint venture transactions

(c) only those which are effected by (d) None of these.

him only

29. Memorandum Joint Venture Account is prepared

(a) to find out profit on venture (b) to find out amount due from co-venturer.

(c) When separate sets of books is (d) When a Co-venturer records all

maintained. Joint Venture transaction in his books.

JOINT VENTURE 47

30. For sending cash to another Co-venturer (Y) in case of Memorandum Joint Venture AccountMethod:

(a) No entry is passed (b) Memorandum Joint Venture A/c is

debited and Cash A/c is credited.

(c) Y’s A/c is debited and Cash A/c (c) Y’s A/c is debited and Memorandum

is credited. Joint Venture A/c is credited.

31. For Purchase of goods for cash for Joint Venture in case of Memorandum Joint Venture AccountMethod.

(a) Goods A/c is debited and Cash (b) Memorandum Joint Venture A/c

A/c is credited. is debited and Cash A/c is credited.

(c) Joint Venture A/c is debited and (d) Another Co-venturers A/c is

Cash A/c is credited. debited and Cash A/c is credited.

31. For payment of Joint Venture Expenses in case of Memorandum Join Venture Account Method:

(a) Goods A/c is debited and Cash (b) Memorandum Joint Venture A/c

A/c is credited. and Cash A/c is credited.

(c) Memorandum Joint Venture A/c is (d) Another Co-venturer’s A/c is debited and

debited and Cash A/c is credited. Cash A/c is credited.

32. For sale of goods for cash in case of Memorandum Joint Venture A/c Method.

(a) Cash A/c is debited and Goods (b) Cash A/c is debited and another

A/c is credited Co-venturer’s A/c is credited

(c) Cash A/c is debited and Joint (d) Another Co-venturer’s A/c is debited

Venture A/c is credited and Memorandum Joint Venture Accountis credited.

33. For recording another Venturer’s share of profit in case of Memorandum Joint Venture A/cMethod:

(a) Joint Venture A/c is debited and (b) Memorandum Joint Venture A/c is

Profit & Loss A/c is credited debited and Profit & Loss A/c is credited

(c) Cash A/c is debited and Profit & (d) Another Co-venturer’s A/c is debited

Loss A/c is credited and Memorandum Joint Venture Accountis credited

(e) none of these


34. For recording own share of Profit in cash of Memorandum Joint Venture A/c Method:

(a) Joint Venture A/c is debited and (b) Memorandum Joint Venture A/c is

Profit & Loss A/c is credited debited and Profit & Loss A/c is credited

(c) Cash A/c is debited and Profit & (d) Another Co-venturers A/c is debited

Loss A/c is credited and profit and loss A/c iscredited.

35. Loss of Joint Venture uninsured goods is

(a) debited to Joint Venture Account (b) credited to Joint Venture Account

(c) debited to Profit & Loss Account (d) not recorded in Joint Venture Account

36. Bad Debts incurred on account of Joint Venture sales are

(a) Debited to Bad Debts Account (b) Debited to Joint Venture Account

(c) Credited to Joint Venture Account (d) Not recorded in Joint Venture Account

37. Cost of Goods lost by fire ` 5,000, Insurance Co. paid a claim of 80%. In this case Joint

Venture Account will be—

(a) debited with ` 5,000 (b) credited with ` 5,000

(c) debited with ` 4,000 (d) credited with ` 4,000

(e) debited with ` 1,000

38. Discount charges of ` 1,000 on discounting a B/R by one of the coventurer’s maintaining alljoint venture transactions in his books of account will be—

(a) debited to Joint Venture Account (b) debited to Profit & Loss Account

(c) debited to Other Co-venturer’s (d) None of the above

Account

39. There are two co-venturers — X & Y. X is recording all Joint Venture transactions in his booksof account. Discount charges on discounting a Bill Receivable accepted by Y are

debited to:

(a) X’s Account (b) Y’s Account

(c) Profit & Loss Account (d) Joint Venture Account

JOINT VENTURE 49

40. There are two Co-venturers — X and Y. X and Y are recording their own joint venture transactionsin their respective books of account. In the books of X, Discount Charges on discounting a BillReceivable acceptedY are debited to:

(a) X’s Account (b) Y’s Account

(c) Profit & Loss Account (d) Joint Venture Account

41. On supply of Goods out of own stock for Joint Venture Business

(a) Joint Venture Account is credited (b) Goods sent on Joint Venture Account iscredited

(c) Other Coventurer’s Account (d) None of these

is credited

42. The share of Profit of the co-venturer maintaining only his own transaction is —

(a) debited to other co-venturer’s (b) debited to Joint Venture Account

Personal Account

(c) debited to Profit & Loss Account (d) None of these.

43. The share of profit of the Co-venturer maintaining all the Joint Venture transactions in hisbooks is —

(a) debited to other co-venturer’s (b) debited to Joint Venture Account

Personal Account

(c) debited to Profit & Loss Account (d) None of these.

44. Closing Stocks taken over by X ` 26,400, and Y ` 60,000. In the books of X who is recording alljoint venture transactions—

(a) X’s A/c Dr. 26,400 (b) Goods sent for joint venture A/c Dr.26,400Y’s A/c Dr. 60,000 Y’s A/c Dr. 60,000

To Joint venture A/c 86,400 To Joint venture A/c 86,400

(c) Goods sent for joint venture A/c Dr.26,400

To Joint venture with Y A/c 26,400

(d) None of these

45. Closing Stocks taken over by X ` 26,400, and Y ` 60,000. In the books of X who is recording hisown joint venture transactions—

(a) X’s A/c Dr. 26,400 (b) Goods sent for joint venture A/c Dr.26,400Y’s A/c Dr. 60,000 Y’s A/c Dr. 60,000

To Joint venture A/c 86,400 To Joint venture A/c 86,400


(c) Goods sent for joint venture A/c Dr.26,400

To Joint venture with Y A/c 26,400

(d) None of these

46. Which of the following statement is true:

(a) In case of separate sets of books (b) Co-venturer’s contribution in cash is

method of Joint venture, co-venturer’s debited in Venturer’s personal Account

contribution of goods is debited in

Joint Bank A/c

(c) Discont on discounting of B/R is (d) Contract money received is

debited to Venturer’s personal account. credited to Joint Venture Account.

47. If any stock is taken over by the venturer, it will be treated as an:

(a) Income of the Joint Venture, hence (b) Expenses of Joint Venture, hence

credited to Joint Venture Account debited to joint Venture Account

(c) To be ignored from Joint Venture (c) It will be treated in the personal book

Transaction. of the venturer and not in the books ofJoint Venture.

48. Which of the following is not true:

(a) Joint Bank A/c is maintained when (b) Under Memorandum Joint Venture

the separate set of books is kept. Account method, each Co-venturer

records only his own transactions.

(c) Unrecovered Abnormal Loss of Goods (d) Bad Debts incurred on account of

by Fire is not recorded on the debit Joint Venture Sales are recorded

side of Joint Venture A/c. on the debit side of Joint Venture A/c.

(e) Discount charges on discounting a

Bill Receivable drawn upon by one

Co-venturer (X) upon another

Co-venturer(y) will not be debited

toY’s A/c is memorandum Joint

Venture A/c Method

49. A and B enter into a joint venture to underwrite the shares of X Ltd. to the extent of 80% X Ltd.make an equity issue of 1,00,000 equity shares of ` 10 each. 80% of the issue are subscribed by

JOINT VENTURE 51

the public. The profit sharing ratio between A and B is 3:2. The balance shares not subscribedby the public are purchased by A and B in profit sharing ratio. How many shares to be purchasedby the conventurers.

(a) 38,400 shares (b) 16,000 shares (c) 12,000 shares(d) 9,600 shares

50. A and B entered into ajoint venture to underwrite the shares of X Ltd. to the extent of 80% XLtd. made an equity issue of 1,00,000 equity shares of ` 10 each. 80% of the issue was subscribedby the public. The profit sharing ratio between A and B was 3:2. The balance shares not subscribedby the public are purchased by A and B in profit sharing ratio. How many shares to be purchasedby A.

(a) 38,400 shares (b) 16,000 shares (c) 12,000 Shares

(d) 9,600 shares

51. A and B purchased apiece of land for ` 20,000 and sold it for ` 60,000; Orginally A hadcontributed ` 12,000 and B ` 8,000. What will be A’s share of profit on venture?

(a) ` 20,000 (b) ` 24,000 (c) ` 30,000 (d) None

52. A and B enter into a joint venture sharing profit and losses in the ratio 3:2. A purchased goodscosting ` 2,00,000. B sold 95% goods for ` 2,50,000. The remaining goods are taken over by Aand B in their profit sharing ratio. A is entitled to get 1% commission on purchase and B isentitled to get 5% commission on sales. A’s share of profit on venture will be:

(a) ` 21,300 (b) ` 27,300 (c) ` 24,900 (d) None

53. A and B enter into a joint venture sharing profit and losses in the ratio 3:2. A purchased goodscosting ` 2,00,000. B sold 95% goods for ` 2,50,000. The remaining goods are taken over by Aand B in their profit sharing ratio. A is entitled to get 1% commission on purchase and B isentitled to get 5% commission on sales. What will be the final remittance?

(a) B will remit ` 2,19,300 to A (b) B will remit ` 2,23,300 to A

(c) B will remit ` 2,10,200 to A (d) By will remit ` 2,22,700 to A

54. A and B B enter into a joint venture sharing profit and losses in the ratio 3:2. A purchased(goods costing ` 2,00,000. B sold 95% goods for ` 2,50,000. A is entitled to get 1% commissionon purchase and B is entitled to get 5% commission on sales. Remaining goods are taken overby B at 95% of cost. What will be the final remittance?



55. A and B enter into ajoint venture sharing profit and losses in the ratio 3:2. A purchased goodscosting ` 2,00,000. B sold 95% goods for ` 2,50,000. A is entitled to get 1% commission on


purchase and B is entitled to get 5% commission on sales. Remaining goods are stolen. A’sshare of profit on venture will be:

(a) ` 15,300 (b) ` 21,300 (c) ` 18,900 (d) None

56. A and B enter into a joint venture sharing profit and losses in the ratio 3:2. A purchased goodscosting ` 2,00,000. B sold 95% goods for ` 2,50,000. A is entitled to get 1% commission onpurchase and B is entitled to get 5% commission on sales. Remaining goods are stolen. Whatwill be the final remittance?



57. A and B enter into a joint venture sharing profit and losses in the ratio 3:2. A purchased goodscosting ` 2,00,000. B sold 95% goods for ` 2,50,000. A is entitled to get 1% commission onpurchase and B is entitled to get 5% commission on sales. Remaining goods are stolen. A isentitled to get interest on Capital @ 5% irrespective of utilization period. A’s share of profit willbe:

(a) ` 15,300 (b) ` 21,300 (c) ` 18,900 (d) None

58. A and B enter into a joint venture sharing profit and losses in the ratio 3:2. A purchased goodscosting ` 2,00,000. B sold 95% goods for ` 2,50,000. A is entitled to get 1% commission onpurchase and B is entitled to get 5% commission on sales. Remaining goods are stolen. A isentitled to get interest on Capital @ 5% irrespective of utilization period. What will be the finalremittance?



59. A and B enter into a joint venture sharing proflt and losses in the ratio 3:2. A purchased goodscosting ` 2,00,000. B sold 95% goods for ` 2,50,000. The remaining goods are taken over by Aand B in their profit sharing ratio. A is entitled to get 1% commission on purchase and B isentitled to get 5% commission on sales. A drew a bill on B for an amount equivalent to 80% oforiginal cost of goods. What will be the final remittance?

(a) B will remit ` 55,300 to A (b) B will remit ` 63,300 to A

(c) B will remit ` 46,200 to A (d) B will remit ` 58,700 to A

60. A purchased goods costing ` 4,00,000, B sold 4/5th of the goods for ` 5,00,000. Balance goodswere taken over by B at cost less 20%. if same sets of books is maintained, find out profit onventure?

(a) ` 1,64,000 (b) ` 1,80,000 (c) ` 1,00,000 (d) None

JOINT VENTURE 53

61. A and B enter into joint venture sharing profit and loss equally. A purchased 200 kg of rice @` 20 kg. Brokerage paid ` 400, carriage paid ` 600. B sold 90% goods @ ` 22 kg. Balance ricewere taken over by B at cost less 20%. The value of rice taken over to be recorded in jointventure will be:

(a) ` 320 (b) ` 400 (c) ` 368 (d) None of these

62. A and B enter into ajoint venture sharing profit and losses equally. A purchased 10,000 kg /ofrice @ ` 50 per kg. B purchased 2000 kg of wheat @ ` 60 per kg. A sold 2000 kg of wheat @ ` 70per kg and B sold 10,000 kg of rice @ ` 60 per kg. The profit on venture when same sets of booksis maintained will be:

(a) ` 2,20,000 (b) ` 2,00,000 (c) ` 2,40,000 (d) ` 1,20,000

63. A and B enter into ajoint venture sharing profit and losses equally. A purchased 10,000 kg, ofrice @ ` 50 per kg. B purchased 2000 kg of wheat @ ` 60 per kg. A sold 2000 kg of wheat @ ` 70per kg and B sold 10,000 kg of rice @ ` 60 perkg. The final remittance when same sets of booksis maintained will be:

(a) B will remit ` 4,20,000 to A (b) B will remit ` 4,00,000 to B

(c) B will remit ` 3,80,000 to B (d) By will remit ` 3,60,000 to A

64. A and B were partners in ajoint venture sharing profits and losses in the proportion of 4/ 5thand 1/5th respectively. A supplies goods to the value of ` 1,00,000 and incurs fexpensesamounting to ` 10,800. B supplies goods to the value of ` 28,000 and his expense amount to `1,600. B sells goods on behalf of the joint venture and realizes ` 1,84,000. B is entitled to acommission of 5 per cent on sales. B settles his account by bank draft. What will be the profit onventure?

(a) ` 34,400 (b) ` 34,000 (c) ` 36,000 (d) ` 36,400

65. A and B entered into ajoint venture. They opened ajoint bank account by contributing ` 4,00,000each. The expenses incurred on venture is exactly equal to ` 4,00,000. Once the work iscompleted, contract money received by cheque ` 4,00,000 and in shares ` 1,00,000. The sharesare sold for ` 80,000. What will be the profit on venture?

(a) ` 5,00,000 (b) ` 80,000 (c) ` 8,80,000 (d) ` 9,00,000

66. Goods costing ` 10,000 are taken over by X at 20% less.

(a) ` 10,000 will be credited to Joint (b) ` 10,000 will be credited to X’s A/c

Venture A/c.

(c) ` 8,000 will be credited to X’s A/c (d) ` 8,000 will be credited to Joint VentureA/c

(e) ` 2,000 will be debited to Joint

Venture A/c


67. Goods costing ` 10,000 destroyed by an accident, insurance claim nil.

(a) ` 10,000 will be credited to Joint (b) No entry will be made in the books

Venture A/c. of Joint Venture.

(c) ` 10,000 will be debited in Joint (d) ` 8,000 will be credited to Joint

Venture Account as Loss Venture A/c.

68. Goods costing ` 10,000 destroyed by an accident. Insurance Co. paid 80%.

(a) ` 10,000 will be credited to Joint (b) No entry will be made in the books

Venture A/c. of Joint Venture.

(c) ` 10,000 will be debited in Joint (d) ` 8,000 will be credited to Joint

Venture Account as Loss Venture A/c.

***********

JOINT VENTURE 55

HOME WORK - 1

1. M and N enter into a Joint venture where M supplies goods worth ` 6,000 and spends Rs 100on various expenses. N sells the entire lot for ` 7,500 meeting selling expenses amounting to Rs200. Profit sharing ratio is equal. N remits to M the amount due. The amount of remittance willbe:

(a) ` 6,700 (b) ` 7,300 (c) ` 6,400 (d) ` 6,100

2. A purchased goods costing ` 42,500. B sold goods costing ` 40,000 at ` 50,000.

Balance goods were taken over by A at same gross profit percentage as in case of sale. Theamount of goods taken over will be:

(a) ` 3,125 (b) ` 2,500 (c) ` 3,000 (d) None

3. A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd make an equity issueof 1,00,000 equity shares of ` 10 each. 80% of the issue was subscribed by the public. The profitsharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchasedby A and B in profit sharing ratio. How many shares to be purchased by A.

(a) 80,000 shares (b) 72,000 shares

(c) 12,000 shares (d) 8,000 shares

4. A and B enter into a joint venture to underwrite shares of K Ltd. K Ltd make an equity issue of2,00,000 equity shares. 80% of the shares underwritten by the venturer. 1,60,000 shares aresubscribed by the public. How many shares are to be subscribed by the venturer?

(a) Nil (b) 32,000 shares

(c) 36,000 shares (d) 40,000 shares

5. A and B purchased a piece of land for ` 20,000 and sold it for ` 60,000 in 2009.

Originally A had contributed ` 12,000 and B ` 8,000. What will be the profit on venture?

(a) ` 40,000 (b) ` 20,000 (c) ` 60,000 (d) Nil

6. A and B enter into a joint venture sharing profit and losses in the ratio 2:1. A purchased goodscosting ` 2,00,000. B sold the goods for ` 2,50,000. A is entitled to get 1% commission onpurchase and B is entitled to get 5% commission on sales. The profit on venture will be:

(a) ` 35,500 (b) ` 36,000 (c) ` 34,000 (d) `38,000


7. P and Q enter into a Joint Venture sharing profits and losses in the ratio 3:2. P purchased goodscosting ` 2,00,000. Other expenses of P ` 10,000. Q sold the goods for 180,000.

Remaining goods were taken over by Q at ` 20,000. The amount of final remittance to be paidby Q to P will be:

(a) ` 2,15,000 (b) ` 2,04,000 (c) ` 2,10,000 (d) None

8. C and D entered into a Joint Venture to construct a bridge. They did not open separate set ofbooks. They shared profits and losses as 3:2. C contributed ` 1,50,000 for purchase of materials.D paid wages amounting to ` 80,000. Other expenses were paid as:

C – ` 5,000 D – ` 15,000

C purchased one machine for ` 20,000. The machine was taken over by C for ` 10,000.

Total contract value of ` 3,00,000 was received by D. What will be the profit on venture?

(a) ` 30,000 (b) ` 40,000 (c) ` 20,000 (d) ` 15,000

9. R and M entered into a joint venture to purchase and sell new year gifts. They agreed to sharethe profit and losses equally. R purchased goods worth ` 1,00,000 and spent ` 10,000 in sendingthe goods to M. He also paid ` 5,000 for insurance. M spent ` 10,000 as selling expenses andsold goods for ` 2,00,000. Remaining goods were taken over by him at ` 5000. What will be theamount to be remitted by M to R as final settlement?

(a) `1,55,000 (b) `1,50,000 (c) `11,5000 (d) `80,000

10. R and M entered into a joint venture to purchase and sell new year gifts. They agreed to sharethe profit and losses equally. R purchased goods worth ` 100,000 and spent ` 10,000 in sendingthe goods to M. He also paid ` 5,000 for insurance. M spent ` 10,000 as selling expenses andsold goods for ` 2,00,000. Remaining goods were taken over by him at ` 5,000. Find out profiton venture?

(a) `70,000 (b) `75,000 (c) `80,000 (d) `85,000

11. A and B enter into a joint venture sharing profit and losses in the ratio 3:2. A will purchasegoods and B will affect the sale. A purchase goods costing ` 200,000. B sold it for ` 3,00,000.The venture is terminated after 3 months. A is entitled to get 10% interest on capital investedirrespective of utilization period.. The amount of interest received by A will be

(a) ` 20,000 (b) ` 10,000 (c) ` 15,000 (d) ` 25,000

12. A bought goods of the value of ` 10,000 and consigned them to B to be sold by them on a jointventure, profits being divided equally. A draws a bill on B for an amount equivalent to 80% ofcost on consignment. The amount of bill will be:

(a) `10,000 (b) `8,000 (c) `6,000 (d) `9,000

JOINT VENTURE 57

13. A bought goods of the value of ` 10,000 and consigned them to B to be sold by them on a jointventure, profits being divided equally, A paid ` 1,000 for freight and insurance.

A draws a bill on B for ` 10,000. A got it discounted at ` 9,500. B sold the goods for ` 15,000.Commission payable to B, ` 500. Find out the profit on venture?

(a) `3,000 (b) `3,500 (c) `4,000 (d) `3,200

14. A bought goods of the value of ` 10,000 and consigned them to B to be sold by them on a jointventure, profits being divided equally, A paid ` 1,000 for freight and insurance.

A draws a bill on B for ` 10,000. A got it discounted at ` 9,500. B sold the goods for ` 15,000.Commission payable to B, ` 500. The amount to be remitted by B to A will be:

(a) `12,500 (b) `3,000 (c) `14,500 (d) `13,500

15. A and B were partners in a joint venture sharing profits and losses in the proportion of 3/5thand 2/5th respectively. A supplies goods to the value of ̀ 80,000 and incurs expenses amounting` 6,000. B supplies goods to the value of ` 14,000 and his expenses amount to ` 2,000. B sellsgoods on behalf of the joint venture and realizes ` 1,50,000. B entitled to a commission of 5% onsales. B settles his account by bank draft. Find out A’s share of profit on venture?

(a) ` 24,300 (b) ` 25,000 (c) ` 26,000 (d) ` 20,300

16. A and B were partners in a joint venture sharing profits and losses in the proportion of 3/5thand 2/5th respectively. A supplies goods to the value of ̀ 60,000 and incurs expenses amounting` 6,000. B supplies goods to the value of ` 16,000 and his expenses amount to ` 3,000. B sellsgoods on behalf of the joint venture and realizes ` 1,20,000. B entitled to a commission of 5% onsales. B settles his account by bank draft. How much amount, B will pay to A as final settlement?

(a) `83,400 (b) `93,200 (c) `80,000 (d) `66,000

17. A and V enter into a joint venture to sell a consignment of biscuits sharing profits and lossesequally. A provides biscuits from stock ` 10,000. He pays expenses amounting to ` 1,000. Vincurs further expenses on carriage ` 1,000. He receives cash for sales ` 15,000. He also takesover goods to the value of ` 2,000. What will be the amount to be remitted by V to A?

(a) `13,500 (b) `15,000 (c) `11,000 (d) `10,000

18. A and V enter into a joint venture to sell a consignment of biscuits sharing profits and lossesequally. A provides biscuits from stock ` 10,000. He pays expenses amounting to ` 1,000. Vincurs further expenses on carriage ` 1,000. He receives cash for sales ` 15,000. He also takesover goods to the value of ` 2,000. Find out profit on venture?

(a) `3,000 (b) `5,000 (c) `6,000 (d) `3,500

19. A purchased 1000 boxes costing ` 200 each. Paid carriage ` 2,000 and insurance ` 3,000. 4/5th of the boxes were sold by B at ` 250 per boxes. Remaining stock were taken over by B at


cost. The amount of stock taken over will be:

(a) ` 40,000 (b) `41,000 (c) `50,000 (d) `50,200

20. Goods costing ` 10,000 destroyed by an accident, insurance claim nil.

(a) ` 10000 will be credited to Joint Venture Account.

(b) No Entry will be made in the books of Joint Venture

(c) ` 10000 will be debited in Joint Venture Account as Loss

(d) ` 8000 will be credited in Joint Venture Account

21. A and B were partners in a joint venture sharing profits and losses in the proportion of 3/5thand 2/5th respectively. A supplies goods to the value of ̀ 60,000 and incurs expenses amounting` 6,000. B supplies goods to the value of ` 14,000 and his expenses amount to ` 1,000. B sellsgoods on behalf of the joint venture and realizes ` 1,00,000. B entitled to a commission of 5% onsales. B settles his account by bank draft. Find out the profit on venture?

(a) ` 14,400 (b) `14,000 (c) `13,000 (d) `13,200

22. A purchased goods costing ` 1,00,000. B sold the goods for ` 1,50,000. Profit sharing ratiobetween A and B equal. If same sets of books is maintained, what will be the final remittance?


(c) A will remit ` 1,00,000 to B (d) B will remit `25,000 to A

23. A purchased goods costing ` 2,00,000, B sold 4/5th of the goods for ` 2,50,000. Balance goodswere taken over by B at cost less 20%. If same sets of books is maintained, find out profit onventure?

(a) ` 82,000 (b) ` 90,000 (c) ` 50,000 (d) None of these

24. A purchased goods costing ` 2,00,000. B sold the goods for ` 2,80,000. Unused material costing` 10,000 taken over by A at ` 8,000. A is entitled to get 1% commission on purchase. B isentitled to get 2% commission on sales. Profit sharing ratio equal. A’s share of profit on venturewill be:

(a) ` 40,000 (b) ` 40,400 (c) ` 40,600 (d) ` 40,200

25. A and B enter into joint venture sharing profit and loss equally. A purchased 100 kg of rice@ ` 20/kg. Brokerage paid ` 200, carriage paid ` 300. B sold 90 kg of rice @ ` 22/kg.Balance rice were taken over by B at cost. The value of rice taken over to be recorded injoint venture will be:

(a) ` 200 (b) ` 250 (c) ` 230 (d) ` 220

26. A and B enter into a joint venture sharing profit and losses equally. A purchased 5,000 kg ofrice @ Rs 50/kg. B purchased 1,000 kg of wheat @ ` 60/kg. A sold 1,000 kg of wheat @ ` 70/

JOINT VENTURE 59

kg and B sold 5,000 kg of rice @ ` 60/kg. The profit on venture when same sets of books ismaintained will be:

(a) ` 1,10,000 (b) `1,00,000 (c) `1,20,000 (d) `60,000

27. A and B enter into a joint venture sharing profits and losses equally. A purchased 5000 kg ofrice @ ` 50/kg. B purchased 1,000 kg of wheat @ ` 60/kg. A sold 1,000 kg of wheat @ ` 70/kgand B sold 5,000 kg of rice @ ` 60/kg. What will be the final remittance?

(a) B will remit ` 2,10,000 to A

(b) A will remit ` 2,10,000 to B

(c) A will remit ` 2,00,000 to B

(d) B will remit ` 1,80,000 to A

28. A and B enter into a Joint Venture by opening a joint bank account contributing ` 10,00,000.The profit sharing ratio between A and B is 3:2. How much amount to be contributed by A?

(a) `6,00,000 (b) `4,00,000 (c) `3,00,000 (d) `5,00,000

29. A, B and C are co-venturer. The relative Profit sharing ratio between A and B is 3:2 and betweenB and C is also 3:2. Find out the profit sharing ratio between A, B and C.

(a) 3:2:2 (b) 9:6:4 (c) 4:3:2 (d) 3:2:1

30. A and B entered into a joint venture. They opened a joint bank account by contributing `2,00,000 each. The expenses incurred on venture is exactly equal to ` 2,00,000. Once the workis completed, contract money received by cheque ` 4,00,000 and in shares ` 50,000. The sharesare sold for ` 40,000. What will be the profit on venture?

(a) `2,50,000 (b) `2,40,000 (c) ` 4,40,000 (d) ` 4,50,000

31. A and B were partners in a joint venture sharing profits and losses in the proportion of 4/5thand 1/5th respectively. A supplies goods to the value of ̀ 50,000 and incurs expenses amountingto ` 5,400. B supplies goods to the value of ` 14,000 and his expense amount to ` 800. B sellsgoods on behalf of the joint venture and realizes ` 92,000. B is entitled to a commission of 5percent on sales. B settles his account by bank draft. What will be the final remittance?

(a) B will remit `69,160 to A (b) A will remit `69,160 to B

(c) A will remit `69,000 to B (d) B will remit `69,000 to A

32. A and B were partners in a joint venture sharing profits and losses in the proportion of 4/5thand 1/5th respectively. A supplies goods to the value of ̀ 50,000 and incurs expenses amountingto ` 5,400. B supplies goods to the value of ` 14,000 and his expense amount to Rs 800. B sellsgoods on behalf of the joint venture and realizes ` 92,000. B is entitled to a commission of 5percent on sales. B settles his account by bank draft. What will be the profit on venture?

(a) `17,200 (b) `17,000 (c) `18,000 (d) `18,200


33. In a Joint venture A contributes ` 5,000 and B contributes ` 10,000. Goods are purchased for` 11,200. Expenses amount to ` 800. Sales amount to ` 14,000 the remaining goods were takenby B at an agree price of ` 400. A and B share profit and losses in the ratio of 1:2 respectively.As a final settlement, how much A will receive?(a) ` 5,800 (b) ` 6,000 (c) ` 5,000 (d) ` 10,800

34. Which of the following statement is true?

(a) There is no difference between Joint Venture and Partnership

(b) Consignment and Joint Venture is same

(c) There is no separate act for Joint Venture

(d) In case of Joint Venture, the number of third party is one only.

35. A and B enter into a joint venture sharing profits and losses in the ratio 2:3. Goods purchasedby A for ` 45,000. Expenses incurred by A ` 13,500 and by B ` 5,200. B sold the goods for `85,000. Remaining stock taken over by B at ` 7,200. What will be the final remittance to bemade by B to A:(a) `69,900 (b) `11,400 (c) `17,100 (d) `7,200

36. If separate sets of books is maintained and suppliers grant discount at the time of making thepayment for purchase of goods, such discount received will be treated as:

(a) Income of Joint Venture, hence credited to Joint Venture A/c

(b) Will be credited to Joint Bank A/c

(c) Will be credited to Co-venturer’s Capital A/c

(d) Will be ignored from the books

37. If unsold goods costing Rs 20,000 is taken over by Venturer at ` 15,000, the Joint Venture A/cwill be credited by:(a) `20,000 (b) `15,000 (c) `5,000 (d) Nil

38. A and B enter into a venture sharing profits and losses in the ratio 2:3. Goods purchased by Afor ` 45,000. Expenses incurred by A, ` 13,500 and by B ` 5,200. B sold the goods for ` 85,000.Remaining stock taken over by B at ` 7,200. The profit on venture will be:(a) ` 28,500 (b) ` 21,300 (c) ` 35,700 (d) ` 9,800

39. State which of the statement is true?

(a) Memorandum Joint Venture Account is prepared to find out profit on venture

(b) Memorandum Joint Venture Account is prepared to find out amount due from co-venturer

(c) Memorandum Joint Venture Account is prepared when separate sets of books ismaintained

(d) In Memorandum Joint Venture Account only one venturer’s transaction is recorded

JOINT VENTURE 61

40. A and B enter into a joint venture for purchase and sale of Type-writer. A purchased Typewritercosting ` 1,00,000. Repairing expenses ` 10,000, printing expenses ` 10,000. B sold it at 20%margin on selling price. The sales value will be:

(a) ` 1,25,000 (b) ` 1,50,000 (c) ` 1,00,000 (d) ` 1,40,000

41. Which of the following statement is true?

(a) When separate set of books is maintained, expenses paid by venturer will be credited tojoint bank account.

(b) When separate set of books is maintained, expenses paid by venturer will be credited toventurer’s capital account.

(c) When separate set of books is maintained, expenses paid by venturer will be credited toJoint venture account.

(d) When separate set of books is maintained, expenses paid by venturer will be credited toOutstanding Expenses Account.


ANSWER KEYS

JOINT VENTURE 63

HOME WORK - 2

1. A and B entered into a joint venture agreement to share the profits and losses in the ratio of 2:1.A supplied 100 ratio sets worth `1,00,000 to B incurring expenses of `5,000 for freight andissuance. B sold the 95 ratio sets for `1,20,000. 5 radio sets were taken over by B. The profit/loss on venture will be

(a) Profit of `20,000 (b) Profit of `15,000

(c) Loss of `20,000 (d) Profit of `20,250

2. Memorandum Joint venture account is a ________

(a) Personal account (b) Real account.

(c) Nominal account. (d) None of the above.

3. In a Joint venture between A and B, A spend `2,000 on freight, `1,000 as godown rent, andalso raised a loan from bank of `50,000 at 18% p.a. repayable after 1 month. B spend ` 5,000 asselling expenses and he also raised a loan from bank of `1,50,000 at 18% repayable after 2months. The total expenses of Joint venture will be

(a) ` 8,000 (b) `8,250 (c) ` 5,250 (d) `13,250

4. Ansh purchased goods costing 2,40,000. Vansh sold goods costing Rs 1,60,000 at Rs 2,40,000.Balance goods were taken over by Ansh at same gross profit percentage as in case of sale. Theamount of goods taken over will be:

(a) ` 1,20,000 (b) ` 80,000 (c) ` 40,000 (d) ` 1,00,000

5. Ram and Shyam enter into a joint venture. Both of them deposited `65,000 and `32,500respectively into a joint venture. Goods were purchased for `75,000 and expenses amounting`10,950 were incurred. Goods sold for `90,000 and goods unsold were taken over by Ram atan agreed value of `2,700. The profit on joint venture is:

(a) ` 17,700 (b) ` 4,500 (c) ` 4,050 (d) `6,750

6. Memoandum joint venture account is prepared _____

(a) When seperate set of joint venture books is prepared.

(b) When each co-venturer keeps records of all the joint venture transactions himself.

(c) When each co-venture keeps records of their own joint venturer transactions.

(d) None of the above.


7. X enters into a joint venture with Y. The goods were purchased by X and Y amounting `20,000and `40,000 respectively. Y incurred the expenses of `5,000 and received cash of `1,000. Goodswere sold by X and Y amounting `22,000 and `39,000. Goods unsold were taken over by Y for`2,000. The profit or loss on joint venture is

(a) Profit of ` 2,000 (b) Loss of ` 2,000 (c) Profit of ` 1,000 (d) Loss of `1,000

8. Joint venture account is ________.

(a) Personal account (b) Real account

(c) Nominal account (d) None of the three

9. Anny and Bunny enter into a joint venture sharing profit and losses in the ratio 1:1.

Anny purchased goods costing Rs 20,000. Bunny sold the goods for Rs 25,000. Anny is entitledto get 1% commission on purchase and Bunny is entitled to get 5% commission on sales. Theprofit on venture will be:

(a) ` 3,550 (b) ` 3,600 (c) ` 3,400 (d) `3,800

10. X and Y enter into a joint venture. X supplied goods to Y from his own stock worth ` 70,000. Xincurred expenses amounting to ` 6000 on joint venture. The venture resulted in a total profitof ` 15,000 of which their ratio of distribution is 2:1. The entire sale proceeds were received byY. Amount received by X from Y in final settlement will be ____

(a) ` 85,000 (b) ` 86,000 (c) ` 80,000 (d) ` 75,000

11. The parties to joint venture are called ___________.

(a) Co ventures (b) Partners (c) Principal and agent(d) Friends

12. A, B and C entered into a joint venture with equal risks contributing ` 20,000, ` 27,500 and `35,000 respectively. The amounts were banked in a joint account. Joint Transactions were asfollows:

Purchase of goods ` 66,600

Expenses on goods purchased ` 6,629

Total sales ` 89,000

C, who effected these transactions, was allowed 6% commission on sales. Profit on joint venturewill be -

(a) ` 10,431 (b) ` 10,000 (c) ` 11,000 (d) ` 12,000

13. ELDER and LARGE enter into a joint venture sharing profits and losses equally. ELDER suppliedgoods to the value of ` 2,500 and incurred expenses of ` 200. LARGE supplied goods to thevalue of ` 2,000 and his expenses amounted to ` 150.

JOINT VENTURE 65

LARGE sold the entire lot of goods on behalf of the joint venture and realized ` 6,000 LARGEwas entitled to a commission of 5% on sales. Profit on the venture

(a) `850 (b) `800 (c) `900 (d) `1000

14. A and B entered into a joint venture and agreed to share profits and losses in the ratio of 3:2. AJoint Bank A/c was opened where in A contributed ` 50,000 and B contributed ` 20,000. Theirtransactions were as follows:

`

Material Purchased 65,000

Wages paid 6,000

Administrative expenses paid by B 3,000

Selling expenses 6,170

Expenses paid by A 1,630

Sales 1,12,000

Remaining stock was taken by A for ` 6200. Joint venture profit will be

(a) 36,000 (b) 36,400 (c) 35,000 (d) 36,500

15. C of Calcutta and D of Delhi entered into a joint venture for the purpose of buying and sellingsecond-hand motor ca` C to make purchases and D to effect sales. A sum of ` 1,00,000 wassent by D to C for this joint venture. C purchases 10 cars for ` 80,000 and spent ` 43500 fortheir reconditioning and dispatched them to Delhi. His other expenses were. 2½% purchasecommission and miscellaneous expenses ` 250.

D spent ` 7500 as railway freight and ` 3750 an Octroi at the time of taking delivery.

He sold all the cars for ` 188500. His expenses were Insurance ` 1500; Garage rent ` 2500;Brokerage ` 6850 and other expenses ` 4500. Profit of venture on will be

(a) `36150 (b) `36000 (c) `35000 (d) None of the three

16. Gattu and Bittu entered into a joint venture where Gattu bought goods of the value ` 1,00,000and consigned them to Bittu to be sold by him on joint venture, profits being divided equally.Gattu paid ` 10,000 for freight and insurance. Bittu sold the goods for ` 1,50,000. Commissionpayable to Bittu ` 5,000. The amount to be remitted by Bittu to Gattu will be

(a) ` 1,25,000 (b) ` 1,35,000 (c) ` 1,27,500 (d) ` 1,40,000

17. Capital Accounts of the co-venturers are of the nature of

(a) Nominal A/c (b) Personal A/c

(c) Real A/c (d) None of the above.


18. A and B enter into a joint venture sharing profits and losses in the ratio 2:3. Goods purchasedby A for ` 45,000. Expense increased by A ` 13,500 and by B ` 5,200. B sold the goods for `85,000. Remaining stock taken over by B as ` 7,200. The profit of the venture will be

(a) `9,800 (b) `35,700 (c) `21,300 (d) `28,500

19. X and Y entered into a joint venture sharing profits and losses equally. X provides goods fromhis stock ` 20,000. He pays expenses amounting to ` 2,000. Y incurs further expenses on carriage` 3,000. He received cash for sales ` 35,000. He also takes over goods to the value of ` 5,000.What will be the amount to be remitted by Y to X?

(a) ` 29,500 (b) ` 35,000 (c) ` 7,500 (d) ` 22,000

20. X & Y purchased a building of ` 1,00,000 and sold it for ` 1,20,000. X had contributed for`60,000 and ` 40,000. They decided to share profits in the ratio of their capital contribution.The profit of venturer will be

(a) ` 12,500 & ` 7,500 (b) ` 8,000 & ` 12,000

(c) ` 75,000 & ` 12,500 (d) ` 12,000 & ` 8,000

21. Ram and Shyam entered into a joint venture. Ram purchased goods costing ` 52,500. Shyamsold goods costing ` 45,000 at ` 60,000. Balance goods were taken over by Ram at ` 10,000.The profit on Joint Venture is

(a) ` 15,000 (b) ` 17,500 (c) ` 7,500 (d) ` 25,000

JOINT VENTURE 67

Documents

JOINT VENTURE · 2019-12-15 · JOINT VENTURE 1. A and B entered into joint venture agreeing to share profits and losses in the ratio of 2: 1. The following transactions took place