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Accounts test on joint venture

3 pages, 8 questions, 1 questions with responses, 1 total responses,

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ACCOUNTS (Two hours) (Candidates are allowed additional 15 minutes for only reading the paper. They must NOT start writing during this time) Answer Question 1 (compulsory) The intended marks for questions or parts of questions are given in brackets [ ]. Transactions should be recorded in the answer book. All calculations should be shown clearly. All working, including rough work, should be done on the same sheet as, and adjacent to, the rest of the answer. 1. Answer the following Questions:-[2 x 3 = 6] a. What is a Joint Venture? b. Why the word memorandum is affixed to Memorandum Joint Venture? c. What are the Partnership? differences 2. Answer the following question:- between Joint Venture and [14 x 3 = 42] a) Arvind, Benu and Cathy jointly undertook the construction of a factory building for Roxy Ltd. at a price of Rs. 15,00,000. The consideration was to be paid as follows : (i) Rs. 12,00,000 in cash (ii) Rs. 3,00,000 in debentures of Roxy Ltd. T hey contributed towar ds the venture as follows : Ar vind Rs. 6,00,000, Benu Rs. 3,00,000 and Cathy Rs. 2,00,000. T hese amounts were deposited in a Joint Bank Account. Ar vind got the plan prepared and paid Rs. 17,000 as architects fees. Benu brought a concrete mixer for Rs. 75,000 and Cathy brought a tr uck valued at Rs. 50,000. T hey pur chased a plant for Rs. 2,40,000 and materials wor th Rs. 2,00,000. Rs. 3,25,000 was incur red for wages. On completion of the venture Ar vind took over materials wor th Rs. 72,000, Benu took over the concrete mixer for Rs. 22,000 and Cathy took back the tr uck at Rs. 18,000. T he plant was disposed of f at Rs. 85,000. T he contract price was dul y received on completion of the project. T he debentures were taken over by Ar vind at Rs. 2,70,000. T hey had agreed to share profits and losses in the r atio of their capital contributions. Prepare : (a) T he Joint Venture Account. (b) T he Joint Bank Account. (c) T he Capital Accounts of the co-venturers. 2. 3. A and B entered into a Joint venture involving the buying and selling of old railway material with an agreement to share profit or loss equally. (The amount is in Rs. Hundreds). The cost of the material purchased was Rs. 30,000 which was paid by A, who drew bill of Rs. 20,000 on B at three months' period. The bill was discounted by A at cost of Rs. 160. The transactions relating to the ventures were: 1) A paid Rs. 200 for carriage, Rs. 600 for commission on sales and Rs. 100 for travelling expenses (ii) B paid Rs. 80 for travelling expenses and Rs. 120 for sundry expenses (iii) Sales made by A amounted to Rs. 21,400 less allowance for faulty goods Rs. 400 and (iv) Sales made by B were Rs. 15,000. The remaining goods were retained by A and B for their private use and these were charged to them as Rs. 1600 and Rs. 2400 respectively. A was credited with sum of Rs. 300 to cover the cost for warehousing and insurance. The expenses in connection with the discounting to the bill were to be treated as a charge against the venture. Prepare the ledger accounts in the books of both the parties and also the memorandum joint venture account.

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