Joint Venture Accounting

Question: Joe and faith were partner partners in the following scheme, joe to take five ninths, and faith fourth ninths of the profits. They agree to guarantee the subscription at 85000 shares of 10 naira each in a company and to pay all expenses up to allotment, in consideration of the company's issuing to them 11500 other shares fully paid. Joe provided cash for registeration and fee 1,140, advertising 21,150 printing and prospectus 2,250.

Faith paid cash for rent of office 400, secretary etc.950, petty cash and sundries 250, stamps 780 solicitor charges 250. Application fell short of the 85000 shares by 3500 and faith paid that number on joint account. The company handed joe and faith the 11,500 shares. They then sold all their shares at 8.20 each less brokage of 0.20 per share. Faith received the net proceeds of 5000. Joe of 10000. Prepare joint account and separate the research accounts of the partners, showing their share of starts. Profit and the amount due to each other in settlement.