Dr. (b) Conversion with retrospective effect: When a consignment is converted into a joint venture with effect from a previous date, the following steps should be followed: Step 1 Prepare Consignment Account in the usual manner. Step 2 Prepare Joint Venture Account (from the same information) assuming that the consignor and the consignee were in joint venture from the very beginning. Step 3 Determine the amount received by the consignee under consignment. Step 4 Determine the amount which would have been received by the consignee as a co-venturer. Step 5 If there is any difference between the two amounts, pass the following adjusting entry: (a) If the amount received as consignee is more than the amount receivable as co-venturer Consignee Account To Profit and Loss Account (b) If the amount received as consignee is less than the amount receivable as co-venturer Profit and Loss Account To Consignee Account Illustration 24 q45 On 1st January, 2017, Singh of Amritsar, a manufacturer of sports goods, sent a consignment of 100 cricket bats to Bose of Calcutta to be sold on a consignment basis at a commission of 20%. The commission is to cover the consignee's expenses but not the freight charges of the goods to Calcutta. The cost of each bat is 100 but is invoiced to Bose at * 150 each. A case containing 10 cricket bats was lost, against which the consignor lodged a claim and collected from the insurance company 800 The consignee paid 540 as freight charges and spent a further sum of 400 as sales expenses. Consignor's expenses amounted to 500. The consignee accepted a bill of exchange drawn by Singh for 3 months (beginning with the date of Dr. despatch) for 10,000 which bill was discounted at 6% p.a. with the bankers. Bose sold 75 bats at 200 each and on 30th June 2017 remitted the balance due from him. After making up the accounts on 30th June 2017, the parties decide to convert their relationship to that of a joint venture on the terms that the cost of a bat would be taken at 150. Singh is to get an interest of 8% p.a. on his investment and Bose to get a commission of 10% on sales. The co-venturers are to share profit and losses equally. Prepare the necessary accounts in the books of Singh and indicate the adjustment journal entry required on conversion of the terms of despatch. The workings should form a part of your