Pand Q buy on joint venture 1,000 shares of a company@ rupees 25 per s...
Joint Venture Account
| Particulars | Amount (Rs.) |
| --- | --- |
| To Expenses | 108 |
| To Cash A/c (P's contribution) | 1,692 (2/3 of 1,500) |
| To Cash A/c (Q's contribution) | 828 (1/3 of 1,500) |
| By Sales A/c | 12,600 (500 shares sold @ Rs. 30 per share) |
| By Expenses A/c | 60 |
| By Sales A/c | 11,848 (440 shares sold @ Rs. 27 per share) |
| By Expenses A/c | 48 |
| By Balance c/d (unsold shares) | 2,064 |
| Total | 15,600 |
| Total | 15,600 |
Profit and Loss Account
| Particulars | Amount (Rs.) |
| --- | --- |
| To Joint Venture A/c (P's share of profit) | 2,040 (2/3 of Rs. 3,060) |
| To Joint Venture A/c (Q's share of profit) | 1,020 (1/3 of Rs. 3,060) |
| By Balance b/d | 0 |
| Total | 3,060 |
| Total | 3,060 |
Explanation
- The joint venture account is prepared to record the purchase and sale of shares and expenses incurred.
- P and Q's contributions are recorded in the joint venture account in proportion to their capital ratio.
- The sales of shares and expenses incurred on sales are recorded in the joint venture account.
- The balance c/d represents the value of unsold shares, which is transferred to the balance sheet.
- The profit or loss is calculated by deducting the cost of unsold shares from the total sales and expenses and is divided between P and Q in proportion to their capital ratio.
- The profit or loss is recorded in the profit and loss account.
Pand Q buy on joint venture 1,000 shares of a company@ rupees 25 per s...
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