Question

QN1 Pete, Hans and Ryan entered into a Joint Venture for dealing in yams. The transactions connected with this venture were: 2016 Jan 8 Pete rented land that cost GHC156 10 Hans supplied seeds that cost GHC48 17 Pete employed labour for planting GH¢105 19 Hans charged motor expenses GHC17 21 30 Pete employed labour for fertilizing GHC36 Feb 28 Pete paid the following expenses: Sundries GHC10, Labour GHC18, Fertilizer a/c GHC29 Mar 17 Ryan employed labour for lifting yams GHC73 30 Sales expenses paid by Ryan GHC39 ?? 31 Ryan received cash from sale proceeds gross GHC987. Required: Show the Joint Venture Account in the books of Pete, Hans and Ryan. Also, show the Memorandum Joint Venture Account if Pete, Hans and Ryan share profits and losses in the ratio 7:3:2. (35 marks)

Answer 1

Solution

Amount in GH Amount 156 In the Books of Pete Joint Venture with Hans and Ryan Account Date Particulars Amount Date Particulars 08-Jan To Bank A/C (Cost of Land) 17-Jan To Bank A/C (Labour for Planting) 105 30-Jan To Bank A/C (Labour for fertilizing) 36 28-Feb To Bank A/C (Sundries, Labour& Fertilizer) 57 31-Mar To Profit on Joint Venture 266 31-Mar By Bank A/C (or bal c/d) 620 (Receipt from Ryan) 620 620 Amount Date Particulars 19-Jan To Bank A/C (Cost of Seeds) 19-Jan To Bank A/C (Motor Expenses) 31-Mar To Profit on Joint Venture In the Books of Hans Joint Venture with Pete and Ryan Account Amount Date Particulars 48 17 114 31-Mar By Bank A/C (or bal c/d) 179 (Receipt from Ryan) 179 179 Date Particulars 17-Mar To Bank A/C 30-Mar To Bank A/C In the Books of Ryan Joint Venture with Pete and Hans Account Amount Date Particulars (Labour for lifting yams) 73 31-Mar By Bank A/C (Sales expenses) 39 Amount 987 (Sale Proceeds) 31-Mar To Profit on Joint Venture 31-Mar To Bank A/C (Payment to Peta and Hans) (or bal c/d) 76 799 987 987 It is assumed that final balances have been paid or received by venturees 31 March. If amount is not paid or received that final amount will be shown as balance c/d

Amount (Sale Proceeds) 987 Date Particulars 08-Jan To Pete A/C 10-Jan To Hans A/C 17-Jan To Pete A/C 19-Jan To Hans A/C 30-Jan To Pete A/C 28-Feb To Pete A/C 17-Mar To Ryan A/C 30-Mar To Ryan A/C Memorandum Joint Venture A/C Amount Date Particulars (Cost of Land) 156 31-Mar By Ryan A/C (Cost of Seeds) 48 (Labour for Planting) 105 (Motor Expenses) 17 (Labour for fertilizing) 36 (Sundries, Labour& Fertilizer) 57 (Labour for lifting yams) 73 (Sales expenses) 39 31-Mar To Profit on Joint Venture -Pete = 456*7/12 -Hans = 456*3/12 -Ryan = 456*2/12 266 114 76 987 987

Profit = 987-156-48-105-17-36-57-73-39 = 456