Lesson Notes By Weeks and Term - Senior Secondary 3

Term: 1^st Term

Week: 8

Class: Senior Secondary School 3

Age: 17 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Financial accounting

Topic:-       Joint ventures account II

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

1. Describe the format of joint venture account
2. Solve some exercises on joint venture account

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

NOTE

JOINT VENTURES ACCOUNT

Ali of Lahore and Bilal of Karachi entered into joint venture for the sale of a consignment of goods at March 2018, profit and losses to be shared equally. Ali paid Rs. 10,000 for goods purchases and consigned to Bilal for Sale. He paid Rs. 400 for freight, Rs. 350 for brokerage and Rs. 100 for sundry expenses. Bilal received these goods and paid Rs. 600 for octri, Rs. 200 for warehouse and Rs. 90 for insurance. He sold the whole consignment for Rs. 16,000.

You are required to pass general entries, joint venture account and prepare co-venturers’ accounts.

SOLUTION

EXAMPLE 2

Black and White enter into joint venture to consign 100 bales of cotton piece and hired a commission agent Red to be sold latter on the joint risk of Black and White, sharing in proportion of 3/5 and 2/5  respectively in September 2017. Black sends 60 bales at Rs. 1,300 each and pays for freight and other charges Rs. 900. White sends 40 bales at Rs. 1,250 each and pays for freight and other charges Rs. 800. All the bales are sold by broker for Rs. 150,000 out of which deducted Rs. 1,500 for his expenses and his commission at 3 per cent and balance remitted to consignors.

You are required to pass general entries, joint venture account and prepare co-venturers’ accounts.

SOLUTION

EVALUATION:

1. X and Y enter into joint venture to ship goods abroad at July 2018. X

sends goods to the value of $ 15,000, pays freight $ 1,500 and sundry

expenses $ 575. Y sends goods valued at $ 10,750, pays freight and

insurance $ 1,200 and sundry expenses $ 750. Y advances to X $ 6,000 on

account of joint venture. X receives account sales and remittance of net

proceeds for the whole of amounting $ 37,500.

Required: Show how transactions would appear in the book of X and

Y respectively, assuming final settlement is made between them.

2. A and B entered into a joint venture to take a building contract which was

worth of Rs. 240,000. They provide following information regarding the

expenses incurred by them.

Plant was value at Rs. 10,000 at the end of contract and A agreed to take it

at that value. Contract amount of Rs. 240,000 was received by B. Pass

necessary journal entries in the book of A and B and prepare joint venture

and co-ventures’ accounts assuming 1/4^th and 3/4^th profit sharing ratio.

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively