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Zorluk: OrtaJoint Venture Accounting: No Separate Books (Memorandum Method)

Emeka and Chidi entered into a joint venture sharing profits and losses equally, maintaining no separate set of books. Emeka supplied goods valued at N60,000\text{N}60,000 and paid freight charges of N4,000\text{N}4,000. Chidi supplied goods valued at N40,000\text{N}40,000 and paid selling expenses of N6,000\text{N}6,000. Chidi sold all the goods for N140,000\text{N}140,000 and collected the full proceeds. What amount will Chidi pay to Emeka in final settlement?

  1. A
    N64,000\text{N}64,000
  2. N79,000\text{N}79,000Cevap
  3. C
    N94,000\text{N}94,000
  4. D
    N49,000\text{N}49,000

Cevap

Chidi will pay N79,000\text{N}79,000 to Emeka in final settlement.
Total venture profit is N140,000−N110,000=N30,000\text{N}140,000 - \text{N}110,000 = \text{N}30,000. Emeka's half-share of profit is N15,000\text{N}15,000. Since Chidi collected all proceeds from sales, he owes Emeka for the goods and expenses Emeka incurred (N64,000\text{N}64,000) plus Emeka's share of profit (N15,000\text{N}15,000), giving a final settlement of N79,000\text{N}79,000.

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1
Calculate the total venture revenue and total venture expenses.
Total Revenue = N140,000\text{N}140,000. Total Expenses = Emeka's goods (N60,000\text{N}60,000) + Emeka's freight (N4,000\text{N}4,000) + Chidi's goods (N40,000\text{N}40,000) + Chidi's selling expenses (N6,000\text{N}6,000) = N110,000\text{N}110,000.
The Memorandum Joint Venture Account pools all income and costs to find the net profit or loss.
2
Calculate net profit and each venturer's share.
Net Profit = N140,000−N110,000=N30,000\text{N}140,000 - \text{N}110,000 = \text{N}30,000. Equal share for Emeka = N30,000÷2=N15,000\text{N}30,000 \div 2 = \text{N}15,000.
Profits are shared equally according to the agreement.
3
Determine the final balance in Emeka's personal account (Joint Venture with Emeka) maintained in Chidi's books.
Amount due to Emeka = Outlay by Emeka (N60,000+N4,000\text{N}60,000 + \text{N}4,000) + Share of Profit (N15,000\text{N}15,000) = N79,000\text{N}79,000.
Chidi collected all sales cash (N140,000\text{N}140,000), so he must reimburse Emeka's expenses and pay him his share of the profit.

Anahtar Kavram

Memorandum Joint Venture Account Settlement
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Konular

Joint Venture Accounting: No Separate Books (Memorandum Method)

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