Problem 1. (Accounting for Joint Operation Transactions) Small, Medium, and Large formed a joint operation. The following were the joint operation transactions: a. Small transferred cash of P100,000 to Large, the appointed manager, representing Small's contribution. b. Medium contributed inventories worth P120,000. c. Large contributed cash of P80,000 d. Large purchased inventories worth P160,000 and paid freight of P20,000 using the cash contributions. e. Large made cash sales of P900,000. f. Large paid expenses of P240,000 from the JO-cash. Other information: • All inventories were sold except one-third from large's purchases. Large was charged for the cost of the unsold inventory. • The joint operators agreed on the following: • Large is entitled to a management fee of P6,000 and a bonus of 15% of profit after management fee and bonus. • Any remaining profit or loss is divided equally.

Problem 1. (Accounting for Joint Operation Transactions) Small, Medium, and Large formed a joint operation. The following were the joint operation transactions: a. Small transferred cash of P100,000 to Large, the appointed manager, representing Small's contribution. b. Medium contributed inventories worth P120,000. c. Large contributed cash of P80,000 d. Large purchased inventories worth P160,000 and paid freight of P20,000 using the cash contributions. e. Large made cash sales of P900,000. f. Large paid expenses of P240,000 from the JO-cash. Other information: • All inventories were sold except one-third from large's purchases. Large was charged for the cost of the unsold inventory. • The joint operators agreed on the following: • Large is entitled to a management fee of P6,000 and a bonus of 15% of profit after management fee and bonus. • Any remaining profit or loss is divided equally.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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