Problem 1: Books of A Books of B Books of C

PROBLEM 1
a. A contributed cash of P100 and merchandise costing P200

Books of A Books of B Books of C
Joint Operation 300 Joint Operation 300 Joint Operation 300

Cash 100 Payable to A 300 Payable to A 300
Inventory 200
b. B contributed merchandise costing P400. Freight In paid by B is P20

Payable to B 420 Inventory 400 Payable to B 420
Cash 20
c. C made purchases amounting to P100 using the cash contributed by A.

No Entry No Entry Joint Operation 100
JO-Cash 100
d. C paid expenses of P200 using its own cash

No Entry No Entry Joint Operation 200
Cash 200
e. C made total sales of P800. All of the merchandise was sold except one-half of those contributed by B.
Receivable from C 800 Receivable from C 800 JO-Cash 800
f.
A B
Amount being allocated
Allocation
1. Salaries
2. Bonus
Profit after salaries and bonus
3. Interest (300x10%) 30
(420x10%) 42
Allocation of loss (24/3) (8) (8)
As allocated 22 34
h. C is charged for the cost of any unsold inventory. Profit or loss after necessary adustments shall be divided equally.
Payable to C 210 Payable to C 210 Inventory 210

Receivable from B 8 Receivable from A 8 Receivable from A 8
Receivable from C 8 Receivable from C 8 Receivable from C 8

Payable to B 454 Payable to A 322 Payable to A 322
Payable to C 24 Payable to C 24 Payable to B 454
Cash 322 Cash 454 Cash 24
Receivable from C 800 Receivable from C 800 JO-Cash 800
PROBLEM 2
JOINT OPERATION
Purchases and Freight In 180 430
Expenses 200
50
A B
Amount being allocated
Allocation
10% commission on purchases:
(100 x 10%) 10
(80 x 10%) 8
20% commission on sales:
(240 x 20%) 48
(180 x 20%) 36
Allocation of loss (52/2) (26) (26)
As allocated 32 18
Cash Settlement
Joint Operation - A
Purchases 100 240 Sales
Expenses 200
Net Share 32
Cash Settlement 92
Joint Operation - A
Purchases 80 180 Sales
Net Share 18 10 Other Income
92 Cash Settlement
JOINT OPERATION
Merchandise contributions 600 800
Purchases and Freight In 120 210
Expenses 200
90
e contributed by B.
C Total
90
30 30
12 12
48
72
(8) (24)
34 90
stments shall be divided equally.

Sales and other item of income
Credit balance - profit
Total
50
18
84
(52)
50
Sales and other item of income
Unsold merchandise, if any
Credit balance - profit

PROBLEM 3
Joint Venture, Inc. reports profit of P1,000,000 in 20x1.
Profit of joint venture - 20x1 1,000,000
Multiply by: Ownership interest 20%
Share in profit of joint venture before adjustment 200,000
Elimination of unrealized profit from downstream sale -
net of tax (100,000 x 60% x 70%) (42,000)
Adjusted share in profit of joint venture - 20x1 158,000
Dec. 31 Investment in joint venture 158,000

20x1 Share in profit of joint venture 158,000

Realized profit from downstream sale - net of tax
(100,000 x 60% x 70%) 42,000

PROBLEM 4
Joint Venture, Inc. reports a profit of P1,000,000 in 20x1.
Elimination of unrealized profit from upstream sale -
net of tax (100,000 x 60% x 70% x 20%) (8,400)


Realized profit from upstream sale - net of tax
(100,000 x 60% x 70% x 20%) 8,400

PROBLEM 5
Elimination of unrealized gain from downstream sale (20,000)
Recognition of realized gain from downstream sale
(20,000/10 years) 2,000

Joint Venture, Inc. reports of P1,200,000 in 20x2.

(20,000/10 years) 2,000

PROBLEM 6
(20,000 x 20%) (4,000)
(20,000/10 years) x 20% 400


(20,000/10 years) x 20% 400

PROBLEM 7
Elimination of unrealized gain from downstream sale (20,000)



PROBLEM 8
(20,000 x 20%) (4,000)



Problem 1: Books of A Books of B Books of C

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Problem 1: Books of A Books of B Books of C

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PROBLEM 1

a. A contributed cash of P100 and merchandise costing P200

Joint Operation 300 Joint Operation 300 Joint Operation 300

b. B contributed merchandise costing P400. Freight In paid by B is P20

c. C made purchases amounting to P100 using the cash contributed by A.

d. C paid expenses of P200 using its own cash

Books of A Books of B Books of C

Books of A Books of B Books of C

Purchases and Freight In 180 430

Purchases and Freight In 120 210

stments shall be divided equally.

Credit balance - profit

Unsold merchandise, if any

Credit balance - profit

Dec. 31 Investment in joint venture 158,000

Joint Venture, Inc. reports profit of P1,200,000 in 20x2.

Dec. 31 Investment in joint venture 282,000

Dec. 31 Investment in joint venture 191,600

Joint Venture, Inc. reports profit of P1,200,000 in 20x2.

Dec. 31 Investment in joint venture 248,400

Dec. 31 Investment in joint venture 182,000

Joint Venture, Inc. reports of P1,200,000 in 20x2.

Dec. 31 Investment in joint venture 242,000

Dec. 31 Investment in joint venture 196,400

Joint Venture, Inc. reports profit of P1,200,000 in 20x2.

Dec. 31 Investment in joint venture 240,400

Dec. 31 Investment in joint venture 180,000

Joint Venture, Inc. reports profit of P1,200,000 in 20x2.

Dec. 31 Investment in joint venture 240,000

Dec. 31 Investment in joint venture 196,000

Joint Venture, Inc. reports profit of P1,200,000 in 20x2.

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