CMA Foundation · Fundamentals of Financial and Cost Accounting · Joint Venture
A and B start a joint venture sharing profits equally. A contributes Rs 60,000 and B contributes Rs 40,000 to the Joint Bank Account. Goods costing Rs 70,000 are purchased and Rs 5,000 expenses are paid. All goods are sold for Rs 1,00,000 cash. What is the balance in the Joint Bank Account after these transactions, before settlement with the venturers?
The Joint Bank Account balance is Rs 1,25,000. Receipts are Rs 1,00,000 capital plus Rs 1,00,000 sales, totalling Rs 2,00,000, and payments are Rs 70,000 for goods plus Rs 5,000 expenses, totalling Rs 75,000, leaving Rs 1,25,000.
- ARs 1,25,000Correct
- BRs 1,30,000
- CRs 1,00,000
- DRs 1,35,000
Explanation
Bank = contributions 1,00,000 + sales 1,00,000 - purchases 70,000 - expenses 5,000 = 1,25,000. Rs 1,30,000 ignores the expenses. Rs 1,00,000 ignores the sales receipts and the contributions net of payments wrongly.
Did you get it right without looking?
One question tells you little. A timed set on Joint Venture shows your real accuracy, how long you take and where you lose marks.
More Joint Venture questions
- In a joint venture where the co-venturers are to be treated as separate from each other, which statement about the venture's profit or loss …
- Which feature distinguishes a joint venture from a regular partnership firm?
- A and B are co-venturers sharing profits 3:2. A purchased goods for ₹50,000 and paid expenses of ₹5,000. B sold all the goods for ₹90,000 in…
- Meena and Nisha run a joint venture sharing profits equally. Meena bought goods for Rs 80,000 and spent Rs 4,000 on freight. Nisha sold good…
- Rohit, a co-venturer, personally pays freight of Rs 3,000 on goods bought for a joint venture kept in separate books. How is this recorded i…
- Which of the following is NOT a feature of a joint venture?