When two or more persons join together to form a common business for a temporary period and to share the profits & losses in the agreed ratio.
Example – Construction of building, roads, contract work, seasonal stall/business.
Assume- Here we take A & B as two persons involved in Joint Venture.
METHODS -
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1) Separate Set of Books. |
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Accounts to be prepared/opened- |
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Other accounts- |
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| 2) Same Set of Books - Complete records | |
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Accounts to be |
prepared / opened- |
|
In the books of A |
In the books of B |
| - Joint Venture a/c | - Joint Venture a/c |
| - Co-Venturers a/c (B a/c) | - Co-Venturers a/c (A a/c) |
| 3) Same Set of Books - Own Records only | |
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Accounts to be |
prepared / opened- |
|
In the books of A |
In the books of B |
| - Joint Venture with B a/c | - Joint Venture with A a/c |
(:(:(:(: JOURNAL ENTRIES :):):):)
| No |
Particulars |
Amount | Amount |
| 1 | Cash contributed by A& B | ||
| Joint Bank A/c | // | ||
| To Co Venture A/c | // | ||
| 2. | Asset Supplied by A | // | |
| Joint Venture A/c | // | ||
| To Co Venture A/c | |||
| 3. | For all Common Expenses | ||
| Joint Venture A/c | // | ||
| To Joint Bank A/c | // | ||
| 4. | Expenses made by Co-Venture A & B | ||
| Joint Venture A/c | // | ||
| To Co-Venture A/c | // | ||
| 5. | Goods sold or Contract money received | ||
| Joint Bank A/c | // | ||
| To Joint Venture A/c | // | ||
| 6. | Goods sold or Contract money received by Co-Venture | ||
| Co-Venture A/c | // | ||
| To Joint Venture A/c | // | ||
| 7. | Goods supplied by Co-Venture A/c | ||
| Joint Venture A/c | // | ||
| To Co-Venture A/c | // | ||
| 8. | Comm. Allowed to Co-Venture A/c (On Sale or Contract money) | ||
| Joint Venture A/c | // | ||
| To Co-Venture A/c | // | ||
| 9. | Salary, Rent, Remuneration, allowed to Co-Ventures | ||
| Joint Venture A/c | // | ||
| To Co-Venture A/c | // | ||
| 10 | Goods taken by Co-Venture | ||
| Co-Venture A/c | // | ||
| To Joint Venture A/c | // | ||
| 11. | Cash withdrawn by A & B | ||
| Co-Venture A/c | // | ||
| To Joint Bank A/c | // | ||
| 12a | Profit on Venture | ||
| Joint Venture A/c | // | ||
| To Co-Venture A/c | // | ||
| 12 b | Loss on Venture | ||
| Co-Venture A/c | // | ||
| To Joint Venture A/c | // | ||
| 13. | Final Remittance received by Co-Venture | ||
| Co Venture A/c | // | ||
| To Joint Bank A/c. | // | ||
| 14. | Further Cash brought by B | ||
| Joint Bank A/c | // | ||
| To Co-Venture A/c | // | ||
| 15. | Contract money received as Shares or Debenture | ||
| Shares or Debenture A/c | // | ||
| To Joint Venture A/c | // | ||
| 16 | Sale of Share | ||
| Joint Bank A/c | // | ||
| To Share Debenture A/c | // | ||
| 16a | Profit | ||
| Share of Debenture A/c | // | ||
| To Joint venture A/c | // | ||
| 16b | Loss | ||
| Joint Venture A/c | // | ||
| To Share of Debenture A/c | // | ||
| 17. | Shares taken over by Co-Venture (Loss on Share will be treated as 16b) | ||
| Co-Venture A/c | // | ||
| To Share / Debenture A/c | // | ||
| 18. | Loan taken by Bank | ||
| Joint Bank A/c | // | ||
| To Bank Loan A/c | // | ||
| 19.a | Repayment of loan with interest (Interest on Loan) see for date | ||
| Joint Venture A/c | // | ||
| To Bank Loan A/c | // | ||
| 19.b | Repayment of loan with Interest | ||
| Bank Loan A/c | // | ||
| To Joint Bank A/c | // | ||
| 20. | Goods Purchase on Credit from "P" | ||
| Joint Venture A/c | // | ||
| To P A/c | // | ||
| 21. | Purchase return or Discount received from "P" | ||
| P A/c | // | ||
| To Joint Venture A/c | // | ||
| 22. | Payment to P in Cash | ||
| P A/c | // | ||
| To Joint Bank A/c | // | ||
| 23. | Bill accepted by (drawn by "P") | ||
| "P" A/c | // | ||
| To Bill Payable A/c | // | ||
| 24. | Bill Payable met | ||
| Bill Payable | // | ||
| To Joint Bank A/c | // | ||
| 25. | Goods Sold on Credit to Q | ||
| "Q" A/c | // | ||
| To Joint Venture A/c | // | ||
| 26. | Sales Return, dis. allowed or B/Debt. | ||
| Joint Venture A/c | // | ||
| To "Q" A/c | // | ||
| 27. | Cash Received from "Q" | ||
| Joint Bank A/c | // | ||
| To "Q" A/c | // | ||
| 28. | Bill received from "Q" | ||
| Bills Receivable A/c | // | ||
| To "Q" A/c | // | ||
| 29. | Bill discounted with Bank | ||
| 29a | discount on Bill (See for date) | // | |
| Joint Venture A/c | // | ||
| To Bills Receivable A/c | |||
| 29b | Cash received against Bill | ||
| Joint Bank A/c | // | ||
| To Bill receivable A/c | // | ||