On September 1, 2015, Red and White formed a joint venture to acquire and sell special merchandise. The contractual arrangements provide that Red is to manage the venture for a fee and that profits and losses are to be divided equally. On September 2, 2015, White invest cash of 40,000, which was used to purchase merchandise. Red incurs expenses amounting to 20,000. On September 15, one-half of the merchandise was sold for 28,000 cash. No further transactions occured until the end of the month. In the books of White, the Investment in JV account on Semptember 30 would show a balance of: • 40,000 • 45,000 • 43,000 36,600
On September 1, 2015, Red and White formed a joint venture to acquire and sell special merchandise. The contractual arrangements provide that Red is to manage the venture for a fee and that profits and losses are to be divided equally. On September 2, 2015, White invest cash of 40,000, which was used to purchase merchandise. Red incurs expenses amounting to 20,000. On September 15, one-half of the merchandise was sold for 28,000 cash. No further transactions occured until the end of the month. In the books of White, the Investment in JV account on Semptember 30 would show a balance of: • 40,000 • 45,000 • 43,000 36,600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On September 1, 2015, Red and White formed a joint venture to acquire and sell
special merchandise. The contractual arrangements provide that Red is to manage
the venture for a fee and that profits and losses are to be divided equally. On
September 2, 2015, White invest cash of 40,000, which was used to purchase
merchandise. Red incurs expenses amounting to 20,000. On September 15, one-half
of the merchandise was sold for 28,000 cash. No further transactions occured until
the end of the month. In the books of White, the Investment in JV account on
Semptember 30 would show a balance of:
• 40,000
• 45,000
• 43,000
36,600
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