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Q: A of Delhi and B of Bangalore entered into a joint venture for purchase and sale of one lot of mopeds. The cost of each moped was Rs.3,600 and the fixed retail selling price; Rs.4,500. The following were the recorded transactions:
Jan 1 A purchased 100 mopeds paying Rs.72,000 in cash on account.
A raised a loan from X Bank for Rs.50,000 at 18% p.a., interest repayable with loan amount on 1.3.2011.
A forwarded 80 mopeds to B incurring Rs.2,880 as forwarding and insurance charges.
Jan. 7 B received the consignment and paid Rs.720 as clearing charges.
A sold 5 mopeds for cash.
B sold 20 mopeds for cash.
Feb. 1 B raised a loan of Rs.1,50,000 from Y Bank, repayable with interest at 18% p.a on
B telegraphically transferred Rs.1,50,000 to A incurring charges of Rs.50. A paid balance
due for the mopeds.
Feb. 26 A sold the balance mopeds for cash.
B sold balance mopeds for cash.
A paid selling expenses Rs.5,000.
B paid selling expenses Rs.20,000.
Mar. 1 Accounts settled between the venturer and loans repaid, profit being appropriated
(1) Joint Venture with B A/c in A’s books; and
(2) Joint Venture with A A/c in B’s books.
You have to assume that each venturer recorded only such transactions as concluded by him.