business accounting project joint venture fion- fong ching shuen (6) betty- leung ka yan(15) irene-...
TRANSCRIPT
Business Accounting ProjectJoint Venture
Fion- Fong Ching Shuen (6)Betty- Leung Ka Yan(15)Irene- Pai Chi Ling(20)
Introduction
A special type of partnership which two or more people joined together to form a business venture for a short period
Small joint ventures – no separate set of books or separate bank account are kept.
Background
As we know, women like bracelets and others decorations. Thus we choose to form a small joint venture to sell the above goods.
Our leased stall is located in Maritime Square
Features of our joint venture Our target customers are female All the venturers are female, so we
can understand the taste of women Our products are hand-made and
diversified, so we can attract different kinds of customers
We hire the leased stall, so we need not pay water and electricity bills
Details of our joint venture Fion,Betty and Irene entered into a
joint venture(FBI Shop) to buy and sell bracelets and others decorations. It was agreed that Irene would be entitled to a commission of 5% on all gross sales made by her, and that the joint venture profits and losses be shared equally.
The following transactions took place in 2002
January 1 Fion purchased decorations at a cost of $13800, paying $7000 in cash and accepting a bill of exchange for two months for the balance.
January 2 Fion sent to Betty decorations which had cost $8800 and paid delivery charges of $1300
January 18 Irene paid $40000 for rent for the five months ending 31 May 2002
January 25 Sales proceeds of $28000 were kept by Betty
February 4 Credit sales of $23500 were made by Irene. A bill of $6000 was accepted by a debtor and was then discounted at $5560
February 10 Goods costing $3500 were stolen in the shop. The loss was to be borne by Fion.
February 15 Fion returned decorations costing $700 to the supplier and full allowance on the returned goods was given.
February 16 Irene purchased decorations at a cost of $12800
February 22 Cash sales of $18000 were made by Irene and half of the sales proceeds were collected by Betty
March 1 The bill payable was honoured by Fion
March 4 The bill receivable was dishonoured and was renewed with an extended maturity of one month. Interest at 10% per annum was charged on the renewed bill.
March 30 Betty sold the remaining stock for $33400 on credit
April 1 Some of the goods sold on 30 March were returned and a credit note of $1000 was sent to the customer
April 4 The bill receivable was honoured on maturity
April 20 Fion agreed to take over the returned goods at a value of $800
May 6 Betty sent a cheque for $10,000 to Irene to provide her with funds.
May 16 Irene paid traveling expenses of $3000
May 30 $1600 of the unsettled debts in Betty’s books was written off
May 31 Fion , Betty and Irene decided to terminate the joint venture and settle their accounts
In the books of FionJoint Venture with Betty and Irene
2002 $ 2002 $Jan 1 Bank:
Purchases
7,000 Feb 10
Profit and Loss:Stock stolen
3,500
Jan 1 Bills payable Purchases
6,800 Feb 15
Bank: Return Outwards
700
Jan 2 Bank: Delivery Charges
1,300 Apr 20
Stock taken over
800
May31
Profit and Loss: Profit on venture
10,645 May31
Bank: settlement
19,745
25,745 25745
In the books of Betty Joint Venture with Fion and Irene
2002 $ 2002 $Apr 1 Debtor :
returns inwards
1,000 Jan 25 Bank: Sales
28,000
May 6 Bank: Irene 10,000 Feb 22
Bank: Sales by Irene
9,000
May30
Debtors: Bad debts
1,600 Mar30
Debtors: Credit Sales
33,400
May31
Profit and Loss: Profit on venture
10,645
May31
Bank: Settlement
47,155
70,400 70,400
In the books of Irene Joint Venture with Betty and Fion
2002 $ 2002 $Jan 18 Bank: Rent 40,000 Feb 4 Debtors: Sales 17,500Feb 4 Bank:
Discounting charges
440 Feb 4 Bills Receivables -Sales
6,000
Feb 16 Bank: Purchases
12,800 Feb 22 Bank: Sales 9,000
Apr 1 Debtors: Returns Inwards
1,000 Mar 4 Bills Receivables -Interests
50
May 16 Bank: Traveling expenses
3,000 May 6 Bank: Betty 10,000
May 31 Profit and Loss: Commission
2,075 May 1 Bank: Settlement
27,410
May 31 Profit and Loss: Profit on venture
10,645
69,960 69,960
Fion , Betty and Irene(FBI Shop)Memorandum Joint Venture Account
$ $
Purchases 26,600 Cash: Sales 46,000
Less:Returns Outwards
700 25,900 Debtors:Sales 56,900
Rent 40,000 102,900
Traveling expenses
3,000 Less: Return Inwards
1,000 101,900
Delivery charges 1,300 Stock taken by Fion
800
Discounting charges
440 Stock stolen borne by Fion
3500
Bad debt 1,600 Interest on bill 50Commission 2,075Share of profit 31,935
106,250 106,250
Question 1 Which of the following are
expenses?
1. Delivery Charges 2. Commission 3. SalesAnswer. A. 1 B. 1, 2 &3 C. 1 & 2 The answer is
Question 2 What is the amount of net profit
in FBI Company?A $31,935
B $39,135
C $31,539 The answer is
Question 3What are the sources of goods?
A. Man-made
B. Finished Goods
C. Both of them The answer is
Question 4Which of the following transaction should not be recorded in the joint
venture account? A. Venturers sent goods to each other
B. Venturers sent cheques to each other
C. Venturers sell goods in cash
The answer is
Question 5 Do you think that memorandum joint venture account is a double
entry? A. Yes
B. No
C. I don’t know
The answer is