Question

21. A and B entered into a Joint Venture to purchase and sell crackers during Diwali Season. Profits or
Losses were to be shared equally between A and B. A was to purchase crackers from Shivkasi and
sent it to B of Mumbai who would sell it.
On 1st November, 2015 A purchased crackers worth 1,00,000 and incurred the following expenses
in sending it to B: Forwarding charges 6,000; Insurance charges * 2,000. He immediately drew
upon
B*1,00,000 for 3 months. The acceptance was discounted at 18% per annum.
On 3rd November, 2015, B paid the following expenses : Cartage charges 3,000; Commission to
agents 75,000 and Rental charges 7 4,000. The whole crackers were disposed of for 2,00,000. He
forwarded a cheque to A for the amount due on 31st January, 2016.
You are required to prepare the following accounts : (i) Memorandum Joint Venture Account, (ü) B
in Joint Venture Account in the books of A, and (ii) A in Joint Venture Account in the books of B.​

Answer 1

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