{"id":3460,"date":"2023-10-05T10:25:41","date_gmt":"2023-10-05T10:25:41","guid":{"rendered":"http:\/\/localhost\/ecole9ja\/?p=3460"},"modified":"2023-10-05T10:33:08","modified_gmt":"2023-10-05T10:33:08","slug":"week-9-ss2-third-term-financial-accounting-notes","status":"publish","type":"post","link":"https:\/\/ecolebooks.com\/nigeria\/posts\/week-9-ss2-third-term-financial-accounting-notes\/","title":{"rendered":"Week 9 – SS2 Third Term Financial Accounting Notes"},"content":{"rendered":"

WEEK NINE
\n<\/strong>TOPIC: JOINT VENTURE ACCOUNTS
\n<\/strong>CONTENT
\n<\/strong><\/p>\n

    \n
  1. \n
    Definition of Joint Venture.\n<\/div>\n<\/li>\n
  2. \n
    Accounting entries required for joint ventures.\n<\/div>\n<\/li>\n
  3. \n
    Practical illustration of joint ventures.\n<\/div>\n<\/li>\n<\/ol>\n

    Definition
    \n<\/strong>Joint venture is a business relationship of two or more persons or venturers, for the purpose of carrying on a particular transaction with the aim of profit making. The principle of Joint Venture borrows from partnership but the difference is that the Venture ceases operation immediate the purpose of its establishment is achieved.
    \nJoint Venture is not a going concern.
    \nMajor account prepared are:
    \ni.\u00a0\u00a0\u00a0\u00a0Individual Joint Ventures Account: basically, the individual in joint ventures prepares joint ventures account affecting him in his books.
    \nii.\u00a0\u00a0\u00a0\u00a0Memorandum Joint Venture Account: This is profit and loss account of joint ventures. In this account, profit or loss attributed to each joint-venturer is ascertained and shared between the individuals concerned.
    \nAccounting entries
    \n<\/strong><\/p>\n

      \n
    1. \n
      Debits all expenses to individual Joint Venture account.\n<\/div>\n<\/li>\n
    2. \n
      Credited all revenue to Individual Joint Venture account.\n<\/div>\n<\/li>\n
    3. \n
      In Memorandum Joint Venture account.\n<\/div>\n<\/li>\n<\/ol>\n

      i.\u00a0\u00a0\u00a0\u00a0Credit both revenue of Joint Venture.
      \nii.\u00a0\u00a0\u00a0\u00a0Debits both expenses of Joint Ventures.
      \nEVALUATION QUESTIONS<\/strong>:
      \n1.\u00a0\u00a0\u00a0\u00a0State three similarities between Joint Venture and Partnership.
      \n2.\u00a0\u00a0\u00a0\u00a0List four differences between Joint Venture and Partnership.
      \nPractical Illustration<\/strong>: Biodun (Kaduna based) and (Kola Lagos based) agreed to enter into Joint Venture in 1992, for the purchase of textile materials in Onitsha and resell.<\/p>\n

      \u00a0Biodun and Kola agreed to share the profit or loss in ratio 3:2 respectively. The following transactions took place.
      \n1992 Feb. 1 Biodun made a cash purchase of goods N2,200
      \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a04 Kola bought N3,500 worth of goods
      \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a010 Biodun purchased goods for N4,000
      \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015 Biodun sold goods for cash N5000 selling expenses N430
      \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a020 Kola sold goods for cash, N6,500
      \n25 The remaining items were dispatched to Kaduna by Kola, transport expenses N600
      \n27 Biodun sold goods N10,200
      \n\u00a0\u00a0\u00a0\u00a0Prepare<\/strong>: \u00a0\u00a0\u00a0\u00a0(a) Individual Joint Venture account
      \n(b) Memorandum Joint Ventures account
      \nNote<\/strong>: In individual Joint Ventures account, if balance b\/d is in the credit side, it implies that the persons or firm has received more than he is entitled to. So he need to pay the amount of the balance to the other party who has received less than his entitlement.<\/p>\n

      \u00a0\u00a0\u00a0\u00a0\u00a0<\/strong>(a) In the books of Biodun:<\/p>\n

      \u00a0\"\"\/\"\"\/Solution\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Joint Ventures with Kola\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>
      \n\t1992\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 N\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01992\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 N
      \nFeb. 1 \u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0Purchases\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02,200\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Feb. 15\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Sales\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 5,000
      \n” 4 \u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0Purchases\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a04,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Sales\u00a0\u00a0\u00a0\u00a0 10,200\u00a0\u00a0\u00a0\u00a0
      \n” 15 \u00a0\u00a0\u00a0\u00a0Selling expenses \u00a0\u00a0\u00a0\u00a0 430
      \n” 29 \u00a0\u00a0\u00a0\u00a0Share of profit \u00a0\u00a0\u00a0\u00a06,582
      \n” \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Bal. c\/d \u00a0\u00a0\u00a0\u00a0 1988
      \n\"\"\/\"\"\/\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 15,200\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015,200
      \n\"\"\/\"\"\/Mar. 3 Cheque to Kola\u00a0\u00a0\u00a0\u00a0 1,988\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0M. I Balance b\/d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1,988<\/p>\n

      \u00a0
      \n\u00a0In the Books of Kola:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0
      \n\"\"\/\"\"\/Joint Venture with Biodun
      \n<\/strong>1992 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0 N\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01992\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 N
      \nFeb. 4 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Purchases\u00a0\u00a0\u00a0\u00a0 3,500\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Feb. 29\u00a0\u00a0\u00a0\u00a0Sales\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,500
      \n 25 \u00a0\u00a0\u00a0\u00a0Transports Exp. 600\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0 29\u00a0\u00a0\u00a0\u00a0Balance c\/d 1,988
      \n\"\"\/ 29\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Share of Profit 4,388
      \n\"\"\/\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 8,488\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a08,488
      \n\"\"\/\"\"\/Mar. 1 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Balance\u00a0\u00a0\u00a0\u00a0 1,988\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Mar. 3 Cheque from Biodun 1,988<\/p>\n

      \u00a0
      \n\u00a0
      \n\u00a0(b) In the books of Kola and Biodun:<\/p>\n

      \u00a0Memorandum Joint Ventures Accounts
      \n<\/strong>\"\"\/\"\"\/1992\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01992
      \nPurchases: \u00a0\u00a0\u00a0\u00a0Biodun\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,200\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Sales Biodun\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a015,200
      \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Kola\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03,500\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Kola\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 6,500
      \nSelling exp. Biodun\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 430
      \nTransport exp. Kola\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 600
      \nShare of profit\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 10,730
      \nBiodun (3\/5 x 10, 790) 6,582
      \nKola (2\/5 x 10,970)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a04,388
      \n\"\"\/\"\"\/\"\"\/\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 21,700\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a021,700
      \n\"\"\/
      \n\tEvaluation Questilon
      \n<\/strong>1.\u00a0\u00a0\u00a0\u00a0Define Joint Venture.
      \n2.\u00a0\u00a0\u00a0\u00a0Mention the major accounts prepared in Joint Venture.<\/p>\n

      \u00a0Reading Assignment<\/strong>: Essential Financial Accounting page 343-348<\/p>\n

      \u00a0WEEKEND ASSIGNMENT
      \n<\/strong>1.\u00a0\u00a0\u00a0\u00a0The major account in Joint Venture are ____________
      \n(a) Individual Joint Ventures account and memorandum\u00a0\u00a0\u00a0\u00a0(b) Profit and Loss account and balance sheet (c) appropriation account and balance sheet (d) cash book and ledger<\/p>\n

      \u00a02.\u00a0\u00a0\u00a0\u00a0Expenditure of each joint venture is ____________
      \n\u00a0\u00a0\u00a0\u00a0(a) credited (b) debited (c) all of the above (d) none of the above
      \n3.\u00a0\u00a0\u00a0\u00a0Revenue of each joint venture is ______
      \n\u00a0\u00a0\u00a0\u00a0(a) credited\u00a0\u00a0\u00a0\u00a0(b) debited (c) none of the above (d) all of the above
      \n4.\u00a0\u00a0\u00a0\u00a0In memorandum account revenue is _______
      \n\u00a0\u00a0\u00a0\u00a0(a) Debited\u00a0\u00a0\u00a0\u00a0 (b) Credited\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(c) averted \u00a0\u00a0\u00a0\u00a0 (d) included
      \n5.\u00a0\u00a0\u00a0\u00a0In memorandum account expenditure is ______________
      \n\u00a0\u00a0\u00a0\u00a0(a) included\u00a0\u00a0\u00a0\u00a0 (b) excluded\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(c) debited\u00a0\u00a0\u00a0\u00a0 (d) credited<\/p>\n

      \u00a0THEORY
      \n<\/strong>A & B entered into a Joint Venture in a consignment of 100 articles each costing N10.
      \nA supplies such goods and sends them to B for sale, paying carriage there on N20. B is to have 10% commission on sales and the profit divided in the ratio of 2:1<\/p>\n

      \u00a0It was found that 10 articles were below standard, and it was agreed that. A would take them back and sell them as his own goods without commission and loss thereon being borne sorely by A. It was further agreed that at the same time 5 articles be returned to A as he was in a position to effect a sale (on account of the Joint Venture) at N18 each, being a better price than what B could get. B sells the remaining articles (less 3 articles taken over by him at an agreed price of N 11 each) at N14 each. The carriage on the goods returned by B to A is N4, and it is agreed that N2 thereof relate to the cost of returning the articles and to be borne by A. <\/p>\n

      \u00a0Show the accounts of A in B’s books. B in A’s books and Memorandum Joint Venture Account.<\/p>\n

      \u00a0GENERAL EVALUATION\/REVISION QUESTIONS
      \n<\/strong><\/p>\n

        \n
      1. \n
        Explain the following : (a) bank loan (b) bank overdraft (c) standing order (d credit\n<\/div>\n<\/li>\n<\/ol>\n

        transfer<\/p>\n

          \n
        1. \n
          State five reasons for making provision for depreciation on fixed assets\n<\/div>\n<\/li>\n
        2. \n
          List four accounts found in each of the following (a) nominal ledger (b) private ledger\n<\/div>\n<\/li>\n<\/ol>\n

          (c) general ledger
          \n 4 What is the difference between depreciation and amortization
          \n 5 List five examples each of assets associated with depreciation and amortization.<\/p>\n","protected":false},"excerpt":{"rendered":"

          WEEK NINE TOPIC: JOINT VENTURE ACCOUNTS CONTENT Definition of Joint Venture. Accounting entries required for…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,274],"tags":[],"class_list":["post-3460","post","type-post","status-publish","format-standard","hentry","category-posts","category-third-term-ss2-financial-accounting"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3460","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/comments?post=3460"}],"version-history":[{"count":1,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3460\/revisions"}],"predecessor-version":[{"id":3461,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/3460\/revisions\/3461"}],"wp:attachment":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/media?parent=3460"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/categories?post=3460"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/tags?post=3460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}