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Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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4. Assuming there is separate records maintained for the joint operation, compute for the Joint Operation Account of Medium, before distributing net income.

5. Assuming there is separate records maintained for the joint operation, compute for the cash settlement for Medium.

Accounting for Joint Operation Transactions Small, Medium and Large formed a joint operation. The following Fact pattern: Copall, Medium and Large formed a joint operation. The following were the joint operation transactions: Small transferred cash of P100,000 to Large, the appóinted manager, representing Small's contribution. Medium contributed inventories worth P120,000. . 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. a. 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: i. Large is entitled to à 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. ii.
Transcribed Image Text:Accounting for Joint Operation Transactions Small, Medium and Large formed a joint operation. The following Fact pattern: Copall, Medium and Large formed a joint operation. The following were the joint operation transactions: Small transferred cash of P100,000 to Large, the appóinted manager, representing Small's contribution. Medium contributed inventories worth P120,000. . 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. a. 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: i. Large is entitled to à 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. ii.
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