Amit and Sumit entered into a joint venture to construct a shopping mall. They agreed to share the profits and losses in the ratio 5:3.
The contract price was agreed upon at Rs 50.00,000, payable as Rs 10,00,000 in cash and 40,00,000 in the form of shares of Rs 10 each.
A Joint Bank Account was opened in which the co-ventures, Amit and Sumit, deposited their contributions of Rs 25.00.000 and Rs 10.00,000, respectively.
Amit also contributed bricks worth Rs 4,80,000.
Sumit too contributed iron worth Rs 55,000 and timber worth Rs 3,25,000.
They acquired cement for Rs 11,00,000 and plant for Rs 15,40,000, from the funds of the venture.
Construction expenses amounted to Rs 8,25,000.
The contract was completed and the contract price was received.
Amit took over the plant at Rs 5,25,000.
The co-venturers sold the shares in the open market at a profit of 10%.
You are required to prepare:
(i) Joint Bank Account
(ii) Joint Venture Account
(iii) Co-venturers’ Accounts
