(a) Explain the meaning of Joint ventures (2 marks)

st
(b) Ken, John and Peter started a joint venture on 1 January 2023 and agreed to share profits
and losses in the ratio of 5:3:2 respectively. The following are transactions made for the 1 st
quarter of 2023.

Date Transaction Ken John Peter

Ksh.’000’ Ks.’000’ Ksh.’000’
Jan 1 Purchased stock 3,000 500
Jan 5 Paid transport 400
Jan 10 Paid rent 20 20 40
Jan 15 Sales 300 400 800
Jan 20 Sales 500 200
Jan 30 Sales 200 460 440
Jan 31 Paid wages 20 30 18
Paid for 3 1 2
advertising
Feb 15 Sales 600 400 300
Feb 24 Sales 800 600 400
Feb 28 Sales 200 500
March1 Paid wages 40 10 30
March 15 Sales 300 250 400
March 20 Sales 480 300 200
March 31 Sales 120 20
March 31 Paid Electricity 20 2
March 31 Paid wages 3 5 10
March 31 Took stock for 4 6 12
personal use at
cost

Required
(a) Prepare joint venture accounts for each co-venturer.
(b) Prepare a joint venture memorandum account. (20 marks)