| Joint Venture, A and C, to Mexico (Schedule B-5) | $1,998.34 | ||
| Gross Returns in cash from C, Managing Partner | $12,998.34 | ||
| Original Investment | 11,000.00 | ||
| Net Profit, as above | $ 1,998.34 | ||
Schedule B-5 should give a complete report of the venture, somewhat as follows:
Joint Venture, with A and C, to Mexico
| Gross Returns as reported by C, Managing Partner | $30,000.00 | |||
| Costs: | ||||
| Merchandise Purchases | $24,000.00 | |||
| Expenses | 890.00 | 24,890.00 | ||
| Gross Profit | $ 5,110.00 | |||
| Commission to C | 900.00 | |||
| $ 4,210.00 | ||||
| Add: | ||||
| Interest paid by C for use of funds after completion of venture | 150.00 | |||
| Net Profit to be distributed: | $ 4,360.00 | |||
| A, Interest on Capital | $ 150.00 | |||
| Profit and loss share, ⁵/₂₄ of $3,640 | 758.33 | $ 908.33 | ||
| C, Interest on Capital | $ 240.00 | |||
| Profit and loss share, ⁸/₂₄ of $3,640 | 1,213.33 | 1,453.33 | ||
| B, Interest on Capital | $ 330.00 | |||
| Profit and loss share, ¹¹/₂₄ of $3,640 | 1,668.34 | 1,998.34 | $ 4,360.00 | |
At the close of the period the account, Joint Venture, A and C, Investment, having served its purpose, is transferred back to B’s regular capital account.
C’s accounts show a balance due A of $5,908.33; due B, $12,998.34; the remainder of the joint income, $11,243.33 {$30,150 - ($5,908.33 + $12,998.34) = $11,243.33}, being his own share.
After the same manner as B, C will make, at the close of his regular fiscal period, a summary of the joint venture, showing it in his statement of profit and loss somewhat as follows:
| Joint Venture, A and B, to Mexico: | ||
| Commission as Managing Partner | $ 900.00 | |
| Share of Profit (see Schedule B-5) | 1,453.33 | $2,353.33 |
| Gross Returns in cash | $11,243.33 | |
| Original Investment | 8,890.00 | |
| Profit, as above, | $ 2,353.33 | |
The student will note that the $150 interest paid by C for the $30,000 joint funds used by him for one month is not recorded as an interest cost of the venture, but is charged to C’s regular Interest Cost account because the funds must have been used for the conduct of his regular business.
The accounts on each partner’s books with his copartners are not ordinary asset and liability accounts but are more of the nature of capital accounts and might be entitled “A, Contribution,” “B, Contribution,” etc. The records of the joint venture comprise a group of accounts which constitute a unit within themselves, showing the partnership relation existing among the several parties from the inception of the partnership to its liquidation.