D, E and F formed a joint operation. They agreed on the following:F is the appointed as the manager. As compensation, F is entitled to a ₱120 salary plus bonus of 25% of profit after deducting the salary and the bonus. However, F will be charged for the cost of any unsold inventory.Interest of 10% per annum is allowed to D’s and E’s capital contributions.Any remaining profit or loss is divided equally. The joint operation was complete after a year. The following were the transactions:D contributed cash of ₱400 and merchandise costing ₱ 800.E contributed merchandise costing ₱1,600. E paid freight of ₱80 in the transfer.F purchased merchandise worth ₱400 using D’s cash contribution.F paid expenses of ₱800 using his own cash.F made total sales of ₱3,200.All inventories were sold except one-half of those contributed by E. How much is the joint operation’s profit after deduction for salary but before deduction for bonus? ______________________ 2. On the cash settlement between the joint operators, A. pays ₱1,288. B. pays ₱1,816. C. receives ₱96. D. All of these

Joint operations refer to the concept which involves joint control arrangement for a single…

Answered: E and F formed a joint operation. They…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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D, E and F formed a joint operation. They agreed on the following:

F is the appointed as the manager. As compensation, F is entitled to a ₱120 salary plus bonus of 25% of profit after deducting the salary and the bonus. However, F will be charged for the cost of any unsold inventory.
Interest of 10% per annum is allowed to D’s and E’s capital contributions.
Any remaining profit or loss is divided equally.

The joint operation was complete after a year. The following were the transactions:

D contributed cash of ₱400 and merchandise costing ₱ 800.
E contributed merchandise costing ₱1,600. E paid freight of ₱80 in the transfer.
F purchased merchandise worth ₱400 using D’s cash contribution.
F paid expenses of ₱800 using his own cash.
F made total sales of ₱3,200.
All inventories were sold except one-half of those contributed by E.