| Joint Venture, A and C, to Mexico | 3,640.00 | ||
| A | 758.33 | ||
| Profit and Loss, on Joint Venture, A and C | 1,668.34 | ||
| C | 1,213.33 | ||
| To distribute profits on the venture in the agreed ratio 5:11:8. | |||
On C’s books:
| Joint Venture, A and B, to Mexico | 3,640.00 | ||
| A | 758.33 | ||
| B | 1,668.34 | ||
| Profit and Loss on Joint Venture, A and B | 1,213.33 | ||
B’s accounts now show a balance due A of $5,908.33; a claim against C for $18,906.67; his own share therefore being the difference, or $12,998.34. That this is the correct amount is seen by comparing it with the amount of B’s Joint Venture, A and C, Investment account showing $11,000, his Interest Income Joint Venture, A and C, showing $330, and his Profit and Loss on Joint Venture, A and C, showing $1,668.34.
4. C now makes settlement in cash with his copartners for the respective amounts due them. The settlement transactions will appear as follows:
On B’s books:
| Cash | 12,998.34 | ||
| C | 12,998.34 | ||
| Cash from C in settlement of Joint Venture. | |||
| A | 5,908.33 | ||
| C | 5,908.33 | ||
| C reports settlement with A. | |||
On C’s books:
| A | 5,908.33 | ||
| B | 12,998.34 | ||
| Cash | 18,906.67 | ||
| Settlement with A and B on Joint Venture. | |||
After these entries have been made on B’s books, the joint venture with A and C will be shown completed. His books show a full net profit on the venture of $1,998.54, reflected in the excess of cash received from C over cash given him for investment. At the end of B’s regular fiscal period, the profit on the venture will ordinarily be shown separately on the statement of profit and loss after the item, Net Profit from Operations. It will be set up as follows: