Joint venture

Nang and Nok form a joint venture to sell a certain type of product according to the following :

a. Nang acts as a managing partner and shall be allowed a compensation of $1,500.

b. Venture members shall be allowed a commission of 10% on their net sales made for the venture.

c. The members will be allowed a 12% a year on their initial investment.

d. The remaining of any profit or loss will be shared equally.

Transactions of the venture follow:

November 1. Nok purchased inventory for $5,000, paid cash $4,500, the remainder payable in 20 days.

November 2. Nang contributed cash $50,000 into the venture.

November 5. Nok invested inventory of November 1 into the venture.

November 9. The venture purchased inventory on credit $6,000, 2/10, n/30.

November 10. The venture paid freight cost for inventory purchased on November 9 $1,120.

November 13. The venture paid in full for creditors of November 9.

November 15. Nok sold all inventory of November 5 for cash $10,000.

November 19. The venture paid creditors of November 1 out of the venture cash.

November 20 The venture received inventory returned from sales of November 15 $500, cost of

Inventory sold $250.

November 22. Nang sold 90% of inventory on November 9 on credit $15,000, 2/10, n/30.

November 27. The venture collected $14,000 from receivables of November 22, the remainder was

directly written off as bad debts.

November 28. The venture paid operating expenses $2,698.

November 29. Nang took over all unsold inventory at its cost as part of her final settlement.

November 30. It was agreed to close the venture, profit entitled for each partner was accounted

for, after the final settlement , the venture was terminated.

Instructions:

1. Journalize the above transactions if separate set of books is kept accounting, assuming periodic inventory system is used.
2. Journalize the above transactions if separate set of books is kept accounting, assuming perpetual inventory system is used.
3. Journalize the above transactions if separate set of books is not kept accounting.

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