AID15357: A and B entered into a joint venture of underwriting the subscription of the entire share capital of the Copper Mines Ltd. consisting of 1,00,000 equity shares of Rs.10 each and to pay all expenses upto allotment. The profits were to be shared by them in proportions of 3/5ths and 2/5ths. The consideration in return for this agreement was the allotment of 12,000 other shares of Rs.10 each to be issued to them as fully paid. A provided funds for registration fees Rs.12,000, advertising expenses of Rs.11,000, for expenses on printing and distributing the prospectus amounting to Rs.7,500 and other printing and stationery expenses of Rs.2,000. B contributed towards payment of office rent Rs.3,000, legal charges Rs.13,750, salary to clerical staff Rs.9,000 and other petty disbursements of Rs.1,750. The prospectus was issued and applications fell short by 15,000 shares. A took over these on joint account and paid for the same in full. The venturers received the 12,000 fully paid shares as underwriting commission. They sold their entire holding at Rs.12.50 less 50 paise brokerage per share. The net proceeds were received by A for 15,000 shares and B for 12,000 shares. Write out the necessary accounts in the books of A showing the final adjustments.

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Q: A and B entered into a joint venture of underwriting the subscription of the entire share capital of the Copper Mines Ltd. consisting of 1,00,000 equity shares of Rs.10 each and to pay all expenses upto allotment. The profits were to be shared by them in proportions of 3/5ths and 2/5ths. The consideration in return for this agreement was the allotment of 12,000 other shares of Rs.10 each to be issued to them as fully paid. A provided funds for registration fees Rs.12,000, advertising expenses of Rs.11,000, for expenses on printing and distributing the prospectus amounting to Rs.7,500 and other printing and stationery expenses of Rs.2,000. B contributed towards payment of office rent Rs.3,000, legal charges Rs.13,750, salary to clerical staff Rs.9,000 and other petty disbursements of Rs.1,750. The prospectus was issued and applications fell short by 15,000 shares. A took over these on joint account and paid for the same in full. The venturers received the 12,000 fully paid shares as underwriting commission. They sold their entire holding at Rs.12.50 less 50 paise brokerage per share. The net proceeds were received by A for 15,000 shares and B for 12,000 shares. Write out the necessary accounts in the books of A showing the final adjustments.

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