Assignment Joint 1.

Assignment Name: Garcia , Mariel G. (Last name, First name, M.I) PROBLEM 1 Davion, Huskar, and Magnus formed a joint venture in 2011 to sell custom made items. Magnus is designated as the manager of the venture. The venturers agreed to provide profits and losses in a 9:7:4 ratio. The venture is terminated on December 31, 2011 even though there are still unsold custom made items. On this date, Magnus’ trial balance shows the following account balances before profit or loss distribution:

Joint Venture Cash Joint Venture Davion, Capital Huskar, Capital

Debit P321,000 P 64,200 P150,000

Credit

P171,200

Magnus receives P78,360 for his share in the venture profit. Furthermore, he agrees to be charged for the unsold custom made items as of December 31, 2011. What is the Cost of the unsold merchandise charged to Magnus? ANSWER: JV before distribution distribution of profit

---------------

P 64,200

JV venture profit (P 78,360 x 20/4)

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P 391,800 391,800

Cost of unsold merchandise inventory

P 456,000

PROBLEM 2 On April 1, 2012: An, Ann, Anne and formed a Joint venture for sale of merchandise. An was designated as the managing participant. Profit and losses are to be divided as follows: An- 50%, Ann-25% and Anne-25%. On October 31, though the joint venture is still uncompleted, the participants participants agreed to recognize profit and loss on the venture to date. The cost of inventory on hand is P25,000. The joint venture account has a debit balance of P15,000 before distribution of  profit and loss. No separate books is maintained for the venture, and the participants record in their individual books all venture transactions. The joint venture profit(loss) on October 31 is: ANSWER: ` Befo Before re dis distr trib ibut utio ion n --- P 15, 15,00 000 0

JV P 25,0 25,000 00 ------------u -uns nsol old d inve invent ntor ory y P 10,000 -------JV profit

PROBLEM 3 Bar and Car join in a venture for the sale of football souvenirs souvenirs at the Rose bowl game. Partners agree to the following: (1) Bar shall be allowed a commission of 20% on net purchases made by him, him, (2) each memb member er shall shall be allowe allowed d a comm commiss issio ion n of 25% 25% on his own sales sales,, (3) any remaining profit shall be shared equally. Venture transactions follow: Bar Car   Cash purchases P950 Expenses paid 150 Sales (each keeps his receipts) 800 600 The joint venture profit (loss) is: ANSWER: JV Purchases ----- P 950 Expenses------- P 150 P 1,100

P 800 P 600

sales

P 1,400 P 300

PROBLEM 4 On April 1, 2011, Robles and Sanchez formed a joint venture to acquire and sell a special type of merchandise. The contractual agreements provide that Robles is to manage the venture for a fee and that profits and losses are to be divided equally. On April 2, 2011, Sanchez Sanchez invests cash of P10,000, P10,000, which was used to purchase merchandise. merchandise. Robles incur expenses amounting to P500. On April 17, one half of the merchandise was sold for P7,200 cash. No further transactions occurred until the end of the month. What is the profit (loss) of the venture for the month of April? ANSWER: Sales ----------------------------------------------------------------------------------P 7,200 Less: Cost of sales Purchases--------------------------------------------P Purchases--------------------------------------------P 10,000 Endi Ending ng inve invent ntor ory( y( P 10,0 10,000 00 x 50%) 50%) --------------------P P 5,00 5,000 0

P 5,00 5,000 0

Gross profit

P 2,200

Expense

P

Less: 500

Net Profit ---------------------------------------------------------------------------------- P 1,700

PROBLEM 5 Jinx and Gremlin are asked by the EFG to handle the marketing of a benefit basketball game. Being avid fans, they readily accepted the offer and formed a joint venture. To achieve an equitable distribution of earnings, they agreed that the partner who finances the purchase of  tickets shall be entitled to a 20% commission, and any remainder was to be divided equally. After the game was over, the following information was obtained: Jinx purchased tickets worth P26,125. Gremlin, advanced P4,125 for expenses, and ticket sales made by Jinx and Gremlin, respectively, were P22,000 and P16,500. How much was Gremlin’s share in the net income (loss) of the joint venture?

ANSWER: Sales (P22,000 + P 16,500)------------------------------------------- P 38 ,500 Less: Cost of sal sales Total revenue

-------------------------------------------------------------------------------- P 26,12 ,125 ------------------------------------------------- P 12,375

Less: Expense

-------------------------------------------------- P 4, 4,125

Gross profit -------------------------------------------------------------------------P 8,250 Less: Jinx’s commission commission (P 26,125 26,125 x 20%) ------------------------------- P 5,225 Net income ------------------------------------------------------------------------ P 3,025 P & L -------------------------------------------------------------------------------

.50

Gremlin’s share in the net income of the venture-------------------- P 1,512.50