X,Y and Z entered into a Joint Venture to sell a certain plot of land. They contributed Rs. 25,000 each. They purchased land of 5,000 sq. m. at Rs. 10 per sq. m. 1/5th of the land was left over for public roads and the balance was divided into 8 plots of equal size. A plan was got prepared for Rs. 2,000 and other expenses were Rs. 3,500. 5 plots were sold @ Rs, 15 per sq. m. and 3 plots were sold @ Rs. 14 per sq. m. Prepare joint venture A/c Joint Bank A/c and Co – Venturer’s A/c. Pass journal entries.
Solution:
Journal Entries in the Books of Joint venture
| Date | Particulars | Lf | Debit (Rs.) | Credit (Rs.) |
| ? 1. | Joint Bank A/c ………… Dr. To x's A/c To y's A/c To z's A/c [Being the initial contribution is made] | | 75000 | 25000 25000 25000 |
| 2. | Joint venture a/c ………… Dr. To Joint bank a/c [Being 5000 sq. m. of land @ Rs. 10 per square meter were purchased] | | 50000 | 5000 |
| 3. | Joint venture A/c ……… Dr. To Joint Bank A/c [Being the plan prepared & other expenses paid] | | 5500 | 5500 |
| 4. | Joint Bank A/c ……… Dr. To Joint venture A/c [Being 5 plots of 500 sq. m. each sold @ Rs. 15 per square meter] | | 37500 | 37500 |
| 5. | Joint Bank A/c ………… Dr. To Joint venture A/c [Being 3 plots of 500 sq. m. each sold @ Rs. 14 per sq. m.] | | 21000 | 21000 |
| 6. | Joint venture A/c ……… Dr. To x's A/c To Y's a/c To Z's A/c [Being the profit made on Joint venture] | | 3000 | 1000 1000 1000 |
| 7. | X's a/c ……… Dr.. Y's A/c ……… Dr. Z's A/c ………Dr. To Joint Bank A/c [Being the final settlement is made] | | 26000 26000 26000 | 78000 |