Separate set of books-joint venture transactions

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Ali and Ahmed carrying business separately as contractors jointly take up the work of constructing a Research Complex of Yousaf Tanneries Ltd, at an agreed price of Rs.250000 payable in cash Rs.200000 and in fully paid shares of a company for balance Rs.50000. A joint bank account is opened in which Ali and Ahmed paid Rs.62500 and Rs.75000 respectively. The following expenses were incurred in completing the construction and the contract price was duly received.

i) Wages paid Rs.75,000.

ii) Materials purchased for Rs.50000.

iii) Material supplied by Ali from his stock Rs.22500.

iv) Consulting Engineers fees paid by Ahmed Rs.5000.

The accounts were closed. Ali taking up all the shares of the company at an agreed value of Rs.40,000 and Ahmed taking the remaining stock of materials at Rs.7,500. Profit or loss is shared by Ali and Ahmed equally.

Required:

Prepare the necessary ledger accounts assuming that a separate set of books are maintained for the joint venture transactions

Reference no: EM13147671

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