‘A’, ’B’ and ‘C’ are doing business as a building contractor. They undertake jointly for the construction of building for newly started joint stock company for a contract price of Rs 25,00,000, payable Rs 20,00,000 in cash and Rs 5,00,000 in debentures of company. Their profit sharing ratio is 1 : 1 : 1.
They opened a separate joint bank account and amount deposited into bank by ‘A’ Rs 3,00,000, ‘B’ Rs 3,75,000 and ‘C’ Rs 2,00,000. The transactions of joint venture were as follows :
Purchases of material Rs 12,00,000, Wages paid Rs 9,75,000, Purchase of plant Rs 1,20,000, Architect’s fees paid by ‘A’ Rs 35,000, Concrete mixer by B Rs 1,25,000 and a Motor truck is given by C worth Rs 1,00,000. A took material for Rs 70,000 and B took concrete mixer for Rs 60,000 after construction work is completed.
Plant sold for Rs 30,000, contract price received and A took debentures 20% less than cost price. Joint venture is completed. Prepare necessary accounts in the books of joint venture.