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TG Chapter 6
TG Chapter 6
TG Chapter 6
The joint operation was complete after a year. The following were the transactions:
A contributed cash of ₱400 and merchandise costing ₱800.
B contributed merchandise costing ₱1,600. B paid freight of ₱80 in the transfer.
C purchased merchandise worth ₱400 using A’s cash contribution.
C paid expenses of ₱800 using his own cash.
C made total sales of ₱3,200.
All inventories were sold except one-half of those contributed by B.
1. How much is the joint operation’s profit after deduction for salary but before deduction for bonus?
a. 192
b. 240
c. 360
d. 420
Joint operation
Freight - in – B 80
Expenses – C 800
Bonus expense** 48
P
B = P -
1 + Br
Joint operation - A
Inventory contributed by
A 400
Joint operation - B
Joint operation – C
9 7
Total 6 2
sales 0 0
8
Expens 0
es paid 0
Other 4
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income 0
The joint operation was completed at the end of the year. Each joint operator is entitled to a 10%
commission on its purchases and a 20% commission on its sales. Any remaining profit or loss is divided
equally.
Joint operation -
A
Joint operation - A
Expenses 800
Net share 128
Cash settlement – receipt 368
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Joint operation – B
5. A, B and C formed a joint operation which was completed during the year. A, the appointed manager,
is entitled to a bonus of 10% of the profit before deducting the bonus. Any remaining profit or loss is
divided equally. On the joint operation’s completion date, B’s and C’s books show the following
balances before adjusting and closing entries:
Book
s of Book
B s of C
Account 16 16
with A Cr. Cr.
Account 48
with B Cr.
Account 56
with C Dr.
The unsold merchandise was charged to A at a cost of ₱88. On the cash settlement between the joint
operators,
a. A receives ₱48.
b. B pays ₱72.
c. C pays ₱32.
d. a and c
Joint operation
As allocated 32 24 24 -
Joint operation – A
Joint operation – B
Contributions 48
Joint operation – C
56 Withdrawals
6. A, B and C formed a joint operation. Profit or loss shall be divided equally. On the joint operation’s
completion date, the books of A, the appointed manager, show the following account balances:
D
e Cr
bi ed
t it
JO – 8
Cash 0
Joint
operati 2
on 0
6
B Co. 0
C Co. 40
A’s share in the joint operation’s profit is ₱16. A agreed to be charged for the unsold merchandise.
How much is the cost of unsold merchandise charged to A?
a. 28
b. 62
c. 68
d. 72
Joint operation
Debit balance 20
7. A, B, and C formed a joint operation. On the joint operation’s completion date, the books of A, the
appointed manager, show the following account balances:
Credi
Debit t
JO – Cash 80
Account
with B 60
Accountin
g with C 88
The cost of unsold inventory is ₱72. The joint operation’s profit is ₱44. How much is the balance of the
joint operation account before distribution of profit?
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a. 28
b. 116
c. 56
d. 0
Joint operation
72 Unsold merchandise
Joint operation
Initial contributions
(10 x 3) 120
Joint operation
Joint operation – B
Inventory
Contributions 40 24 taken
10. On January 1, 20x1, PATRIMONY Co. entered into a joint arrangement classified as a joint venture. For
an investment of ₱2,000,000, PATRIMONY Co. obtained 30% interest in HERITAGE Joint Venture, Inc.
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During the year, HERITAGE Joint Venture, Inc. reported profit of ₱4,000,000 and other comprehensive
income of ₱800,000, i.e., a total comprehensive income of ₱4,800,000. HERITAGE Joint Venture, Inc.
declared dividends of ₱2,400,000. How much is the carrying amount of the investment in joint venture
on December 31, 20x1?
a. 2,720,000
b. 2,000,000
c. 2,480,000
d. 4,160,000