Account First Term Scheme of Work and Lesson Notes for Senior Secondary School Three( SSS 3)
First Term Scheme of Work Account for SSS 3
- Revision of SS2 Work
- Company income statements
- Appropriation Account of a company
- Company is balance sheet
- Security and Exchange Commission
- Security and Exchange Commission
- Nigerian stock Exchange
- Hire purchase Account
- Consignment Account
- Joint ventures Account
- Revision
- Examination
LESSON NOTE FOR THE FIRST WEEK ENDING 15TH OF SEPTEMBER 2020
CLASS- SS3
DURATION– 40 MIP
NOS OF PERIOD- 4
TOPIC – Revision of SS2 work.
PREVIOUS KNOWLEDGE:- The student had been examined on the various topics taught in the SS2 scheme
BEHAVIOURAL OBJECTIVE:- The student should be able to:
Develop confidence in the study of Accounting as a subject.
Recall all topics taught in Ss2
INSTRUCTION MATERIAL:- Board
REFERENCE MATERIAL:- SS2 scheme content.
Revision of SS2 first term to Third term work.
Evaluation:
What are your views so far in the studying of Accounting as a subject.
Assignment:
An Economy cannot survive without an accountant discuss.
LESSON NOTE FOR THE SECOND WEEK ENDING 22ND SEPTEMBER2020.
SUBJECT- ACCOUNTING
CLASS- SS3
DURATION- 40 MIP
NO OF PERIOD- 4
TOPIC-Company income statement
Behavioral objectives- The student should be able to:
State the meaning of income statement
List and explain the basic contents of income statement of a company
State the treatment of the items in the company’s Final Account
Previous knowledge:- The students have been taught about the meaning, classification and Types of company in the previous class.
Instructional material – News papers, Business Journals, marker and white board.
Reference material- Simplified and Amplified Book-keeping and Accounting for SS1-3 by O.A Longe & R.A Kazeem
Content:
Company income statement is the statement containing the financial account of a company. The statement of account of company is similar to that of a sole trader except for the appropriate account which has some peculiar feature.
PECULIAR FEATURE OF A COMPANY’S STATEMENT OF ACCOUNT
Directors remuneration and auditors fees. These should be deducted from the net profit before arriving at profit before tax.
Share capital.
Authorized share capital: this is the amount of cap[ital which a company has been authorized to raise in the memorandum ay association
Issued capital: This is the part of the authorized capital that has been issued to the public by the company for subscription
Called-up capital: this is the part of the issued share capital which the directors have called upon the share holder to pay
Taxation: this is the compulsory sum of money which the government or tax authority expected the company to pay out of the profit made.
Appropriation Account: This is the account where the profit after tax is shared (appropriated). Items found in t5his account include; transfer to reserve, interim dividend pond, proposed dividend, preliminary expense written off etc.
Reserves
Debentures
Dividend
Presentation;
Step i. Revision of the previous topic
Step ii Introduction of the new topic
Step iii Explanation of the new topic
Step iv General class discussion
Assignment:
What is a statement of account
List and explain five peculiar features of a company and explain all the terms used in it.
Conclusion:
The teacher summarizes the lesson and give the student note.
LESSON NOTE FOR THE THIRD WEEK ENDING 29-09-2020
CLASS – SS3
DURATION – 40 M/P
NO OF PERIOD – 4
TOPIC: – Company’s Appropriate Account
OBJECTIVES – The students should be able to:
State the meaning of Appropriation account
Prepare the appropriation account of a company
Draw a format of a company trading profit and loss account and appropriation account.
PREVIOUS KNOWLEDGE – The students had been taught the introduction to company income statements in the previous lesson.
INSTRUCTIONAL MATERIALS – Business journals, white board and marker.
Reference Materials: Simplified and Amplified financial accounting by Femi Lunge, Financial Accounting made easy by Igben Robert O.
CONTENT:-
FORMAT OF A COMPANY APPROPRIATION ACCOUNT
XYZ LIMITED
Appropriation account for the year ended 31st December 2007
| N | N | N | N | ||
| Dividend Proposed Interim Goodwill written off Preliminary expenses Written off Transfer to reserves Corporation tax Retained profit | X x | X X X X X X xx | Profit & loss b/f Net profit b/f | X X xx |
ILLUSTRATIONS
Ikemesie Enterprises Limited has an authorized share capital of N200,000 divided into `60,000 ordinary share of N1. Each and 40,000 6% preference share of N1 each. 120,000 of the ordinary shares has been issued and fully paid. The profit after taxation for the year ended 31st December, 1919 was N49,000. The profit and loss account had a credit balance of N24,000 as at 1st January, 1999.
Additional information:
Write off preliminary expenses N1,700
Transfers N6,000 to general reserve and N4,000 to capital reserve.
Half of the dividend due on this preference shares had been paid in July.
An interim dividend of 5% had been paid on ordinary shares in September, 1991 and the directors proposed a final dividend of 10%. You are required to prepare the
Appropriation account
Solution
Appropriation account for the year ended 31/12/99
| N | N | N | N | ||
| Interim dividend Preference share Ordinary share Proposed dividend ord Preliminary expense written off Transfer to reserve General Retain profit | 2400 6,000 6000 4000 40900 73,000 | Bal b/d Profit after tax | 73,000 |
Workings: Preference dividend 6% x 40,000 = N2400
Interim ½ x 2400 = N1,200: Find = N1200.
Presentation
Step i: Teacher revises the previous topic
Step ii: Introduces the new topic
Step iii: Explanation of the salient points
Step iv: General class discussion
Evaluation:
List and explain the contents of the company’s appropriation account.
What are the differences between company appropriation account and the partnership appropriation account.
Assignment: Simplified and Amplified Book-keeping and accounting by Femi Lunge page 415 Ex. 3X and Ex 4.
Conclusion
The teacher summarizes the lesson and give students note on the topic.
LESSON NOTE FOR THE FOURTH WEEK ENDING 6TH OCTOBER 2020
CLASS – SS2
DURATION – 40 M/P
NO OF PERIOD – 4
TOPIC – CONTROL ACCOUNT
SUB-TOPIC – SALES LEDGER CONTROL ACCOUNT
PREVIOUS KNOWLEDGE – The students had been taught errors and correction of errors in the previous lesson.
OBJECTIVES – The students are expected to:
Define control account
Identify the classification of control account
Explain the purpose of total debtors control accounts
Prepare the sales ledger control accounts.
INSTRUCTIONAL MATERIAL – White board and marker
REFERENCE MATERIAL – Simplified and Amplified Book keeping and Accounting for SSS1-3 by Femi Lounge. Essential financial Accounting for SS 1-3 by R.A. Kazeem and O.A. Longe .
CONTENT
Control accounts can be defined as a memorandum account, the balance of which reflects the aggregate balances of the totals in related ledgers which are prepared following the double entry principles. It is used to monitor debt due from the debtors and debt due to the creditors.
Control account helps in error location
It provide check on the accuracy of balances of ledger
It prevent fraud
It help in ascertaining the balances of the debtors and creditors ledger
It is used to detect missing figure.
Classification
Total debtors control account
Total creditors control account
Sales ledger control account
This is the control accounts for saler ledger. It can also be referred to as total debtors control account. It shows the total debt that from the debtors.
FORMAT
Dr TOTAL DEBTORS CONTROL ACCOUNT Cr
| N Dr Balance b/d x Credit sales x Debit note issued x Int. charge on our due account x Dishonoured cheque x Discount disallowed x x Bal b/d x | N Cr balance b/d x Cash from debtors x Return inwards x Bad debts x Discount allowed x Credit note issued x Bills receivable x Contra/set off x Bal c/d x x |
Presentation
Step i: Revision of previous topic
Step ii: Introduction of new topic
Step iii: Explanation of new topic
Step iv: General class discussion
Evaluation
(i) What is control account?
(ii) Mention the division of control account
Assignment
Simplified and Amplified Book keeping and accounting page 280 Ex 1x
Conclusion – The teacher give students note.
LESSON NOTE FOR THE FIFTH WEEK ENDING 13TH OCTOBER 2020
CLASS – SSS 3
DURATION – 40 M/P
NO OF PERIOD – 4
TOPIC – COMPANY BALANCE SHEET
PREVIOUS KNOWLEDGE – The students have been taught about the balance sheet of a sole trader.
BEHAVIOURAL OBJECTIVE – The students are expected to:
(i) Draw the format of a company balance (“T” format and vertical format)
(ii) Differentiate between a sole trade balance sheet and the company balance sheet.
(iii) State the meaning of the contents in the balance sheet
INSTRUCTIONAL MATERIAL – Business daily, white board and marker
REFERENCE MATERIAL – Essential financial accounting for SSS 1-3 by R.A. Kazeem and A.O. Longe , Simplified and Amplified Book keeping and Accounting for SSS – 3 by Femi Longe .
CONTENT
FORMAT
XY LTD
T. FORMAT
Balance sheet as at 31st December 19xy
| Authorized share capital Ordinary share 10% preference share Issued share capital Ordinary share of N1.00 each 80% Prof. share of N1. Each | x x x x | x x x | Land & building Furniture Machinery Premises Goodwill Investments Quoted Unquoted | x x x x x x | – (xi (xi (xi | x x x x x x |
| Reserves Share premium General reserves Retain profit Capital reserve Long term liabilities X % debenture X% Bank loan Current liabilities Bills payable Income in advance Corporation tax Creditors Proposed dividend Accruals (expenses) | x x x x x x x x x x | x x xx xxx | Preliminary expense Current Assets Stock Debtors Cash in hand Bank Bills receivable Prepayments Accrued income | x x x x x x x | x x xxx |
Cost Acc. N.D.V
Depr.
N N N
Land and building x x
Furniture x (xi x
Machinery x (xi x
Premises x (x) x
xx
Investments: Quoted x
Unquoted x x
Preliminary expenses x
Current Assets
Stock x
Debtors x
Cash at bank x
Prepayments x xx
Less current liabilities
Bills payable x
Corporation tax x
Proposed dividend x
Creditors x
Accruals x (x) x
Xxx
Financed by: N N
Issued capital
Ordinary share x
X% preference share x x
Reserves:
Share premium x
General reserves x
Retain profit x x
Long term liability
Debenture x
X% bank loan x x
Xx
Presentation:
Step i: Revision of the last lesson
Step ii: Introduction of the new topic
Step iii: Explanation of salient points
Step iv: General class discussion
Evaluation:
Define the following terms
Preliminary expenses
Interim dividend
Proposed dividend
Debenture
Unquoted investment
Quoted investment
Share premium
Retain profit
Assignment simplified and amplified Book keeping and accounting for SSS1-3 page 419 Exc 2.
Conclusion: The teacher summarizes the lesson and give students note on the topic taught.
LESSON NOTE FOR THE SIXTH WEEK ENDING 20TH OCTOBER 2020
CLASS – SS3
DURATION – 40 M/P
NO OF PERIOD – 4
TOPIC – SECURITY AND EXCHANGE COMMISSION
OBJECTIVES – The students are expected to:
(i) State the meaning of S.E.C
(ii) State the functions and objectives of S.E.C.
PREVIOUS KNOWLEDGE – The students are familiar with the capital market.
INSTRUCTIONAL MATERIAL – charts
REFERENCE MATERIALS
CONTENTS:
THE SECURITY AND EXCHANGE COMMISSION S.E.C.
This is the apex regulatory organization of the Nigeria capital market. The S.E.C was established in 1979s.
FUNCTIONS
Valuation of shares
Registration of securities
Registration of market operators
Approve of shares allotment
Enforcement of sanction against erring operators
Approval of regulation of merger and acquisition
Approved time and amount of security
Determine the duration for which a company’s security will be sold
It serves as the apex regulatory organ of the capital market.
OBJECTIVES
To create a conclusive environment for fair dealing
To ensure orderliness and equitable dealing in security
To promote the investors
To protect the investors’
To monitor effectively the activities of unscrupulous capital market operators.
To maintain proper surveillance
Ensuring the integrity of the security business.
TOOLS OF REGULATION
Registration
Enforcement
Surveillance and monitoring
Inspections
Rule making
PRESENTATION:
Step i: Revision of the last topic taught
Step ii: Introduction of the new topic
Step iii: Explanation of salient points
Step iv: General class discussion
Evaluation
What is the meaning of S.E.C?
List and explain at least five functions of the S.E.C.
Assignment
List and explain the objectives of the S.E.C
With detail explanation state the regulatory tools used in the capital market.
Conclusion
The teacher summarizes the lesson and give the students note on the topic.
LESSON NOTE FOR THE SEVENTH WEEK ENDING 27TH OF OCTOBER 2020
CLASS – SS3
DURATION – 40
NO OF PERIOD – 4
TOPIC – The stock exchange market.
OBJECTIVES – The students should be able to:
Know the meaning of the stock exchange market
State the functions and roles of the stock exchange market.
INSTRUCTIONAL MATERIALS – Charts, white board and marker
REFERENCE MATERIALS – Simplified and Amplified financial accounting by R.A. Ibrahim and R.A. Kazeem for SS 123,
CONTENT:
The stock exchange market is a specialized market where existing security are traded. It is a market for buying and selling shares and other securities. The Nigerian stock exchange was established in 1960. The at establishing it allows only registered brokers to engage in the business of trading in securities. It had branches in Lagos, Ibadan, Abuja, Kaduna, Portharcourt, Kano and Ilorin.
FUNCTION OF N.S.E.
Facilitates purchases and sales of securities
Provision of corporate information
Valuation of price of securities
Provision of information about daily transactions
Provision of rules and regulation
Provide professional advice
Ensuring the liquidity of securities
Help the government to raise fund.
Enables the companies to raise fund
Ensure the stability of the capital market
Provide market for investors
Increases the volume of security through bonus issue, right issue etc.
Presentation:
Step i: Revision of the previous lesson
Step ii: Introduction of new topic
Step iii: Explanation of salient points
Step iv: General class discussion
Evaluation
Define the stock exchange market
What are the functions of the stock exchange market?
Assignment
To what extent has the stock exchange market contributes to the development of Nigeria capital market?
Conclusion
The teacher summarizes the lesson and give the students note
LESSON NOTE FOR THE EIGHT WEEK ENDING 03-11-2020
CLASS – SS3
DURATION – 40 M/P
NO OF PERIOD – 4
TOPIC – THE STOCK EXCHANGE MARKET.
PREVIOUS KNOWLEDGE – The students had been introduced to the capital market and the control security clearing system in the previous lesson.
OBJECTIVES: The students are expected to:
(i) Know the meaning of the stock exchange market
(ii) State the functions and roles of the stock exchange market.
INSTRUCTIONAL MATERIAL – White board and marker
REFERENCE MATERIAL – Simplified and Amplified financial accounting by Femi Longe .
CONTENT:
The stock exchange market is a specialized market where existing security are traded. It is a market for buying and selling of shares and other securities. The Nigerian stock exchange market was established in 1960. The act establishing it allows only registered brokers to engage in the business of trading in securities. It has branches in Lagos, Ibadan, Abuja, Kaduna, Portharcourt, Kano and Ilorin.
FUNCTIONS OF N.S.E
Facilitates the purchase and sales of securities.
Provision of corporate information
Valuation of price of securities
Provision of information about daily transactions
Provision of rules and regulation
Provides professional advice
Ensuring the liquidity of securities
Help the government to raise fund
Enables the government to raise fund
Ensures the stability of the capital market
Provides market for investors
Increases the volume of securities through bonus issue, right issue etc
Presentation:
Step i: Revises the last lesson
Step ii: Introduces the new topic
Step iii: Give details explanation of some salient points
Step iv: General class discussion
Evaluation
Define the stock exchange market
What are the functions of the stock exchange market
Assignment:
To what extent has the stock exchange market contributes meaningfully to the development of Nigeria capital market.
Conclusion
The teacher summarizes the lesson and gives students note on the topic
LESSON NOTE FOR THE NINETH WEEK ENDING 10-11-2020
CLASS – SS3
DURATION – 40 M/P
NO OF PERIOD – 4
TOPIC – HIRE PURCHASE ACCOUNT
PREVIOUS KNOWLEDGE- The students are used to buying goods on credit and instalmental payment.
BEHAVIOURIAL OBJECTIVE – The students are expected to:
Define Hire purchase account
State and explain the parties involves in Hire purchase
State and explain the terms used in Hire purchase contract.
Prepare a single Hire Purchase Contract Account
INSTRUCTIONAL MATERIAL – White Board and Marker
REFERENCE MATERIAL – Accounting for special Business by Dare Adekunle, Simplified and Amplified Book keeping and accounting by Femi Longe .
CONTENT:-
A Hire purchase transaction is one in which the seller if an item parts with the possession and transfer same to a buyer who, in return pays to the seller an amount known as hire purchase price by a way of an initial deposit plus periodic installments over the hire period. The buyer does not possess the title to the goods until the full hire purchase price is settled common Hire Purchase TERMS.
Hire purchase price
Cash Deposit/initial deposit
Installment
Hire purchase interest
PARTIES TO HIRE PURCHASE CONTRACT
Hirer or Buyer
Hirer or Dealer/seller
Finance Company
ACCOUNTING ENTRIES
In preparing Hire Purchase Account in the book of the buyer, the following are the principal methods:
Interest paid method
Interest suspend method
INTEREST PAID METHOD – This is the commonest and simplest method of accounting for Hire Purchase under this method, the full cash price is debited to the Asset account and credited to the vendor’s account; interest is treated as being paid and credited to vendor’s account and all cash payment being debited.
PROCEDURES:
Assets Acquire on Hire purchase
Dr Hire purchase account Cash price
Cr Vendor account
Payment of initial deposit
Dr Vendor account
Cr Cash/Bank account
Interest due at date of installment
Dr Hire purchase interest account
Cr Vendor account
Installment cash payment made
Dr Vendor account
Cr Bank/cash account
Interest written off to profit & loss
Dr Profit and loss account
Cr Hire purchase interest account
Depreciation: on Asset
Dr Profit and loss account
Cr Provision for depreciation account
ILLUSTRATION
R. Dickson whose accounting year ends on 31st December bought a machine on Hire purchase from Ise – Ekiti Ltd on 1 January 2010. The cash price of the machine was N83,800. Interest to the calculated at 15% on the half yearly balance outstanding. There would be 5 annual installments each payable on 30th June. The first four installments to be N25,000 each while the balance to be settled in the fifth year of the account installments commence on 30th June 2010. Depreciation on the machine was provided at 10% on cost per annum.
You are required to show the following account.
i. machine account
ii. Ise – Ekite Ltd account
iii. Hire purchase interest account
iv. Depreciation of machine account
v. How the transaction would appear in the balance sheet as at 31/12/2012
Solution
Machine account
| 1.1.2010 Ise – Ekit 1.1.2010 Bal b/d | `N 83,800 83,800 | 31.12.00 bal c/d | 83,800 |
ISE-EKITI FINANCE LTD ACCOUNT
| N 30-06 instalment 25,000 31-12- Bal c/d 69,966 94,966 30-6- instalment 25,000 31-12. Bal c/d 53,979 78979 60504 | N 1-1-10 machine 83,800 30-06 interest 6285 31-12 interest 4881 94960 1-1-11 Bal b/d 69,966 30-6 interest 52,979 31-12. interest 3766 78979 1-1-12 Bal b/d 53979 30-06 interest 4048 31-12 Interest 2477 60504 |
H.P INTEREST ACCOUNT
| N 30-06 Ise -Ekiti 6205 31-12 Ise – Ekiti 4881 11,161 30-6 Ise – Ekiti 5247 31-12 Ise-Ekiti 3766 9013 30-6-12 Ise – Ekiti 4048 31-12. Ise-Ekiti 2477 6525 | N 31-12-10 P & L 11,166 11,166 31-12-12 P & L 9013 9013 31-12 -12 P & L 6525 6525 |
PROVISION FOR DEPRECIATION ACCOUNT
| N 31-12 Bal c/d 8380 31-12 Bal c/d 16760 16760 31-12-12 Bal c/d 25140 25140 | N 31-12-10 P & L 8380 1-1-11 Bal b/d 8380 31-12-11 P & L 8380 16.760 1-1-12 Bal c/d 16760 31-12 P & L 8380 25140 |
BALANCE SHEET EXTRACT FIXED ASSETS:
Machine on Hire purchase 83800
Less Depreciation on Hire Purchase 25,140
Calculation of Hire purchase Interest
N
Cash price 83,800
Interest (Jan. – June) 6/12 x 15% x 83800 6255
90085
Less 1st Installment 25,000
65085
Interest (July-Dec) 6/12 x 15% x 65085 4881
69966
Interest (Jan – June) 6/12 x 15% x 69966 5247
75213
Less 2nd installment 25,000
50213
Interest (July-Dec) 6/12 x 15% x 50213 3761
53979
Interest (Jan-June) 6/12 x 15% x 53579 4048
58027
Less 3rd installment 25,000
33,027
Interest (July – Dec) 6/12 x 15% x 33,027 2477
35504
Interest (Jan – June) 6/12 x 15% x 35504 2663
38167
Less 4th installment 25,000
13,167
Presentation:
Step i: Revision of the previous topic
Step ii: Introduction of the new topic
Step iii: Explanation of salient points
Step iv: General class discussion
Evaluation
What is Hire purchase account
State and explain the “Term and parties” used and involve in Hire Purchase account respectively.
Assignment
Simplified and Amplified Book keeping and accounting by Femi Longe Page 484 Ex 1 x and 3.
Conclusion
The teacher summarizes the lesson and give students note on the topic.
Lesson Note For The Tenth Week Ending 2020-11-2020
CLASS – SSS3
DURATION – 40 M/P
NO OF PERIOD – 4
TOPIC – Consignment Account
BEHAVIOURIAL OBJECTIVES – The students are expected to:
Know the meaning of consignment
State and give the meaning of terms used in a consignment account.
Differentiate between the consignment and sales of goods.
Prepare a consignment account in the book of the consignor and in the book of the consignee
INSTRUCTIONAL MATERIAL – White board and marker
REFERENCE MATERIAL – Financial Accounting made simple by Robert O. Igben:, simplified and Amplified financial Accounting by Femi Longe .
CONTENT:
A consignment of goods is the sending of goods by the owner to his agent who then collects, stores and sells them on behalf of the owner. The owner is known as the consignor while the agent is known as the consignee. The relationship between the consignor and the consignee is a principal agent relationship.
Account sales:
As stated above, the consignee is an agent, it is necessary for him to send returns to the consignor on a regular basis. The returns are sent on a document known as “Account Sales” showing the sales of the consignee, the expenses of the consignee and the balance due to the consignor. If the consignor had collected deposit from the consignor at the onset of the transactions the deposit will be deducted on the account sales before arriving at the balance due to the consignor. Shown below is the format of an account sales.
N N
Sales x
Less expenses
Storage charges x
Selling & distributive exp. X
Consignee’s commission x (x)
Balance due to consignor xx
Date……………………………..….. Signal…………………………………
ILLUSTRATION
The learning field Ltd U.S.A consigned goods to the value of N10,000 to their agent Corona of Nigeria. He paid freight N20, Insurance N200, shipping charges N200 and drew a bill on Corona at 90 days for N7,500. This bill, learning field Ltd discounted with their bankers, the charge therefore being N100. In the course, Corona renders account sales showing the amount for which the goods were disposed off as being N12500. He deducts his commission which is 7 ½ % and expenses on landing N50, warehouse rent N50, and remits a draft on union Bank for the balance. Show the necessary ledger accounts in the books, of the consignor and consignee.
Solution
Consignors Book: Learning field Ltds
Dr Consignment account Cr
| Goods on consignment 10,000 Freight 20 Insurance 200 Shipping charge 200 Commission 938 Loading expenses 50 Warehouse rent 50 Profit & loss 1042 12500 | Sales 12500 12500 |
Goods on Consignment A/c
| Trading 10,000 | Consignment A/c 10,000 |
CASH BOOK
Bill Receivable 7500 Discount charges 100
Consignee 3962 Consignment Act
Freight 20
Insurance 200
Shipping charges 200
Bal c/d 10942
11,462 11,462
Consignee Account
| Consignment sales 12500 12500 | Bill receivable 7500 Loading expenses 50 Warehouse rent 50 Bank 3962 12500 |
Bill Receivable Account
Odegbemi 7500 Cash book 7500
In the book of the consignee Odegbemi
Cash book
| sales 1250 12500 |
|
Consignor account: Fizi Ltd
|
|
|
Bills payable
|
|
|
Presentation:
Step 1: Revision of the previous topic
Step 2: Introduction of the new topic
Step 3: Explanation of salient point
Step 4: General class discussion
Evaluation
What is consignment Account?
List and explain the basic terminology used in consignment account
What is account sales?
Assignment
Simplified and Amplified Book keeping and Accounting for SSS1-3 Ex 4 and 9x
Conclusion: The teacher summarizes the lesson and gives the student note on the topic.
CLASS – SS3
DURATION – 40 M/P
NO OF PERIOD – 4
TOPIC – JOINT VENTURE ACCOUNT
BEHAVIOURIAL OBJECTIVE – The students are expected to:
Define or state the meaning of joint venture account.
State the differences between Joint venture and partnership account
Prepare a joint venture account
PREVIOUS KNOWLEDGE – The students are familiar with partnership and consignment account.
INSTRUCTIONAL MATERIAL – White board and marker
REFERENCE MATERIALS – Essential financial accounting for SS 1 – 3 by O.A. Longe et al, Simplified and Amplified Book keeping and Accounting by Femi Longe.
CONTENT:
A joint venture is simply a venture undertaken by two or more persons with a view to gaining profit. It differs from a partnership in that it is of a more temporary character.
Nowadays, Joint ventures are offer concerned with one isolated transaction. Such as buying up bankrupt stocks or engaging in similar operations
MAIN CHARACTERISTICS
NO spate books are kept to record the transactions by ventures
Each venture keeps a record of his part of the enterprise in his normal accounting records.
The profit sharing ratio must be clearly defined.
Every entitlement of the venture must be clearly stated.
ILLUSTRATION:
A and B entered into a joint venture to acquire surplus and reject crockery from the manufacturer to sell them at a series of one day market. They agreed to share joint venture profit and loss in ratio 3-2 respectively.
At the onset A sent a cheque for N2000 to provide him with fund for B his participation in the venture. They managed to sell all the goods bought by 31st January 2014 by which date their cash transactions had been.
A B
Sales 3200 2100
Travelling expenses 327 463
Advertising 103 91
Stall rent 85 70
Wages of causal ledger 48 –
Sunday expenses 59 29
Purchases 1600 1100
Settlement between the co-ventures required:
Joint venture with B in the ledger of A
Joint venture with A in the ledger of B
Memorandum Joint venture account
Solution
In the book of A joint venture with B Account
| Bank (transfer to B) Bank travelling expenses Advertising Stall rent Wages Sunday expenses Purchases Profit & loss | 2000 32020 103 85 48 59 1600 795 502020 | Sales Bank |
3200
202020
502020 |
In the ledger of B
Joint venture with A Account
| Travelling expenses Advertising Stall rent Sundry expenses Purchases Profit & loss Bank | 463 91 70 29 1100 530 202020 4100 | Bank Sales |
2000
2100
4100 |
MEMORANDUM JOINT VENTURE
| Travelling (327+ 467) Advert (103 + 91) Stall rent (85 + 70) Wages Sunday (59 + 29) Purchases (1600 + 1,100) Share of profit A B | 790 194 155 48 88 2700 798 530 5300 | Sales (7200 + 2100) |
5300
5300 |
NB – Share of profit B
A = 3/5 x 1325 B = 2/5 x 1325
= N795 = N530
Presentation:
Step 1: Revision of last topic
Step 2: Introduction of the new topic
Step 3: Explanation of salient points
Step 4: General class discussion.
Evaluation
What is joint venture account?
Write out the basic differences between a joint venture and a partnership account.
Assignment
Simplified and Amplified Book keeping and Accounting page 278/279 Ex 4x and 7x.
Conclusion
The teacher summarizes the lesson and gives students note on the topic
