Miss Strawberry Company On 1 April 2002, Emily, Renee and Queenie entered into a joint venture in the wholesale business of sanrio’s dolls, sharing profits and losses in the ratio of 2:1:2. Wages would be given to Renee who is the secretary in the warehouse. Also, a sales commission of 5 per cent on sales would be given to the venturer who made the sales. Additionally, Queenie would be entitled to a del credere commission of 2 per cent on her own sales, in consideration of which she was required to bear all risk of bad debts in respect of the sales made by her.

Apr1 Emily purchased dolls for 500 Large dolls of $70 each, 600 Median dolls of $40 each, 840 Small dolls of $25 each and paid carriage of $500. Apr 5 Emily paid rent of $20000 for warehouse Apr 16 Queenie sent a cheque for $4000 to Renee to provide her funds for the joint venture. Apr 20 Renee purchased dolls for 700 Large dolls of $70 each, 300 Medium dolls of $40 each, 650 Small dolls of $25 each May 9 Emily forwarded 400 large dolls,420 medium dolls and 760 small dolls to Queenie. May 28 Renee paid Electricity of $988 and Sundry expenses of $1200.

Jun 3Queenie sold dolls for 350 Large dolls of 100 each, 420 medium dolls of 70 each, 740 small dolls of 45 each. Queenie received cash of $80000 and the rest is made by credit sales. Jun 28Some of the Median dolls sold on 3 Jun were returned and a credit note of $1400 was sent to the customer. Jul10Renee sent goods 400 Large, 100 Medium and 350 Small dolls to Queenie. Jul 12Renee sent goods 300 Large, 200 Medium and 300 Small dolls to Emily Aug 1Emily sold dolls for 100 Large of $100 each, 180 Medium of $70 each, 80 Small of $40 each on credit.

Jun 3Queenie sold dolls for 350 Large dolls of 100 each, 420 medium dolls of 70 each, 740 small dolls of 45 each. Queenie receive cash of $80000 and the rest is made by credit sells. Jun 28Some of the Median dolls sold on 3 Jun were returned and a credit not of $1400 was sent to the customer. Jul 10Renee sent goods 400 Large, 100 Medium and 350 Small dolls to Queenie. Jul 12Renee sent goods 300 Large, 200 Medium and 300 Small dolls to Emily Aug 1Emily sold dolls for 100 Large of $100 each, 180 Medium of $70 each, 80 Small of $40 each on credit.

Aug 3 Renee paid the insurance fee of $2500 Aug 31 Queenie sold dolls for 370 Large of $100 each, 85 Medium of $70 each and 340 Small $40 each on cash sale. Sep 5 Selling expense of $1600 were paid by Renee. Sep 13 Emily sold dolls for 290 large dolls of $100 each, 180 Medium dolls of $70 each and 300 small dolls of $45. She received cash of $5100 from sales and drew a one–month bill of exchange for the balance which was accepted by customer. Sep 17 Queenie only received cash of $17000 from credit sales.

Sep 25Emily only received cash of $24000 from credit sales. Sep 30The joint venture was terminated, and Emily decided to take over the remaining stock valued at $9000. Wages of $1,200 were paid to Renee. You are required to prepare: (a) The joint venture accounts in the books of Emily, Renee and Queenie. (b) A memorandum joint venture account.