Zainab and Chidi opened a Joint Bank Account to execute a joint venture in imported fabric… — JAMB UTME

Zainab and Chidi opened a Joint Bank Account to execute a joint venture in imported fabrics, sharing profits and losses in the ratio of $3:2$ . Zainab and Chidi contributed $\text{₦}1,500,000$ and $\text{₦}1,000,000$ respectively into the Joint Bank. Goods costing $\text{₦}1,800,000$ were paid for from the Joint Bank, and freight charges of $\text{₦}120,000$ were also paid from the Joint Bank. Zainab supplied additional materials valued at $\text{₦}250,000$ from her personal stock. Chidi incurred advertising expenses of $\text{₦}80,000$ from his personal funds and was entitled to a $5\%$ commission on gross sales for managing the venture. Total sales proceeds of $\text{₦}3,000,000$ were deposited into the Joint Bank Account. At the close of the venture, Zainab took over unsold goods valued at $\text{₦}150,000$ . What is the final cash amount in Naira ( $\text{₦}$ ) paid to Chidi from the Joint Bank Account to close his account?

Cevap: 1530000 ₦

Cevap

The final cash amount paid to Chidi from the Joint Bank Account to settle his ledger account is ₦1,530,000.

The final cash settlement is determined by finding the closing balance of Chidi's personal ledger account. Total revenue earned by the venture is ₦3,150,000 (₦3,000,000 cash sales + ₦150,000 stock taken by Zainab). Total expenses equal ₦2,400,000 (₦1,800,000 purchases + ₦120,000 freight + ₦250,000 materials supplied by Zainab + ₦80,000 advertising paid by Chidi + ₦150,000 commission earned by Chidi). The net profit is ₦750,000, of which Chidi's 2/5 share is ₦300,000. Crediting Chidi's account with his capital contribution (₦1,000,000), advertising expenses paid (₦80,000), commission (₦150,000), and profit share (₦300,000) gives a final settlement amount of ₦1,530,000 paid to him from the Joint Bank Account.

Adım Adım Çözüm

Calculate Chidi's management commission on gross sales.

Commission = 5% × ₦3,000,000 = ₦150,000

Chidi is entitled to a 5% commission on total sales proceeds generated by the joint venture.

Determine total income credited to the Joint Venture Account.

Total Credits = ₦3,000,000 (Sales) + ₦150,000 (Unsold stock taken over by Zainab) = ₦3,150,000

Both sales proceeds and the value of inventory taken over by co-venturers represent income to the venture.

Determine total costs and expenses debited to the Joint Venture Account.

Total Debits = ₦1,800,000 (Purchases) + ₦120,000 (Freight) + ₦250,000 (Zainab's materials) + ₦80,000 (Chidi's advertising) + ₦150,000 (Chidi's commission) = ₦2,400,000

All direct venture costs paid via Joint Bank, personal expenditure by venturers, and earned commission are venture expenses.

Calculate the overall net profit of the joint venture.

Net Profit = Total Income (₦3,150,000) - Total Expenses (₦2,400,000) = ₦750,000

Net profit is the excess of total venture revenue over total venture costs.

Calculate Chidi's share of the net profit using the profit-sharing ratio of 3:2.

Chidi's Share of Profit = (2 / 5) × ₦750,000 = ₦300,000

Chidi receives 2 parts out of the total 5 parts of the net joint venture profit.

Calculate the closing credit balance on Chidi's Personal Account.

Chidi's Balance = ₦1,000,000 (Initial Capital) + ₦80,000 (Advertising paid) + ₦150,000 (Commission) + ₦300,000 (Share of profit) = ₦1,530,000

Chidi's ledger account is credited with all cash contributed, personal expenses incurred on behalf of the venture, commission earned, and his profit share.

Anahtar Kavram

Final cash settlement in joint venture accounts using a separate set of books

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