On 1 July 2023 Perth Ltd entered into a 50:50 joint operation with Tasmania Ltd to develop robotic home appliances. Each operator’s initial contribution was $1 million. Perth contributed $500 000 cash and equipment with a fair value of $500 000 and a book value of $400 000. The remaining useful life of the equipment contributed by Perth is 5 years. Tasmania Ltd contributed $1 million cash. Additional information: An extract of the joint operation’s balance sheet at 30 June 2024 shows: Assets $ Cash 290,000 Raw materials 80,000 Work in progress 460,000 Finished goods inventories 100,000 Equipment 500,000 less: Accumulated depreciation -100,000 Total Assets 1,330,000 Liabilities Accrued wages 40,000 Accounts payable 140,000 Total Liabilities $180,000 Net Assets 1,150,000 Production costs for the joint operation for the year ended 30 June 2024 were: Raw materials $420,000 Wages 340,000 Depreciation 100,000 Overhead expenses 550,000 Total production costs 1,410,000 Less Cost of inventories -950,000 Work in Progress at 30 June 2024 $460,000 Cash receipts and payments for the year ended 30 June 2024 were: Payments Receipts Contributions $1,500,000 Wages $300,000 Raw materials 360,000 Overhead expenses 550,000 $1,210,000 $1,500,000 Tasmania Ltd’s initial contribution entry will include a debit to the Cash in JO account of: $750 000. $1 000 000. $1 500 000. $2 000 000.
On 1 July 2023 Perth Ltd entered into a 50:50 joint operation with Tasmania Ltd to develop robotic home appliances. Each operator’s initial contribution was $1 million. Perth contributed $500 000 cash and equipment with a fair value of $500 000 and a book value of $400 000. The remaining useful life of the equipment contributed by Perth is 5 years. Tasmania Ltd contributed $1 million cash.
Additional information:
An extract of the joint operation’s balance sheet at 30 June 2024 shows:
|
Assets |
$ |
|
Cash |
290,000 |
|
Raw materials |
80,000 |
|
Work in progress |
460,000 |
|
Finished goods inventories |
100,000 |
|
Equipment |
500,000 |
|
less: Accumulated |
-100,000 |
|
Total Assets |
1,330,000 |
|
Liabilities |
|
|
Accrued wages |
40,000 |
|
Accounts payable |
140,000 |
|
Total Liabilities |
$180,000 |
|
Net Assets |
1,150,000 |
Production costs for the joint operation for the year ended 30 June 2024 were:
|
Raw materials |
$420,000 |
|
Wages |
340,000 |
|
Depreciation |
100,000 |
|
Overhead expenses |
550,000 |
|
Total production costs |
1,410,000 |
|
Less Cost of inventories |
-950,000 |
|
Work in Progress at 30 June 2024 |
$460,000 |
Cash receipts and payments for the year ended 30 June 2024 were:
|
Payments |
Receipts |
|
|
Contributions |
$1,500,000 |
|
|
Wages |
$300,000 |
|
|
Raw materials |
360,000 |
|
|
Overhead expenses |
550,000 |
|
|
$1,210,000 |
$1,500,000 |
- Tasmania Ltd’s initial contribution entry will include a debit to the Cash in JO account of:
- $750 000.
- $1 000 000.
- $1 500 000.
- $2 000 000.
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