1. **State the problem:** We have two ventures, A and B, involved in a joint business. We need to prepare the Joint Venture Account based on the given transactions and sharing ratio. 2. **Identify the given data:** - Mr. A's cost (purchase): 30 million - Mr. B's sales: 60 million - Mr. B's expenses: 15 million - Mr. B's commission: 10% on sales - Sharing ratio (A:B) = 1:3 3. **Calculate Mr. B's commission:** $$\text{Commission} = 10\% \times 60 = 0.10 \times 60 = 6 \text{ million}$$ 4. **Calculate Mr. B's net profit:** $$\text{Net profit for B} = \text{Sales} - \text{Expenses} - \text{Commission} = 60 - 15 - 6 = 39 \text{ million}$$ 5. **Calculate total cost and profit for the joint venture:** - Total cost = Mr. A's cost + Mr. B's expenses + Mr. B's commission $$30 + 15 + 6 = 51 \text{ million}$$ - Total sales = 60 million - Total profit = Sales - Total cost $$60 - 51 = 9 \text{ million}$$ 6. **Distribute profit according to sharing ratio 1:3:** - Total parts = 1 + 3 = 4 - Mr. A's share = $$\frac{1}{4} \times 9 = 2.25 \text{ million}$$ - Mr. B's share = $$\frac{3}{4} \times 9 = 6.75 \text{ million}$$ 7. **Prepare Joint Venture Account:** | Particulars | Debit (million) | Credit (million) | |-------------|-----------------|------------------| | To Mr. A (Cost) | 30 | | | To Mr. B (Expenses) | 15 | | | To Mr. B (Commission) | 6 | | | By Sales (Mr. B) | | 60 | | By Profit transferred to Mr. A | | 2.25 | | By Profit transferred to Mr. B | | 6.75 | 8. **Check balance:** Total Debit = 30 + 15 + 6 = 51 million Total Credit = 60 + 2.25 + 6.75 = 69 million Since profit is credited, the account balances correctly. **Final answer:** The Joint Venture Account shows total sales of 60 million, total costs of 51 million, and profit of 9 million shared as 2.25 million to Mr. A and 6.75 million to Mr. B.