1. Silverman Company reports net income of P200,000 each year and pays on
dividend of P70,000. The company holds net assets of P1,500,000 on
January 1, 20x3. On that date, Weights Company purchases 50 percent of
the outstanding stock for P900,000, which gives it the ability to have joint
control with Treadmill over Silverman. At the purchase date, the excess of
Weights's cost over its proportionate share of Goldman's book value was
assigned to goodwill. On December 31, 20x4, what is the investment in
Silverman Company balance (equity method) in Weights's financial records?
___390,000___ (1,030,000)
Assume that Silverman Company's ownership structure is as follows:
80% is needed to direct relevant activities:
50% ownership of Weights Company;
30% ownership of Treadmill Company; and
20% ownership of Punchbag Company
What is the amount of Income from Investment in Silverman 's Company in
Weights financial records as of December 31, 20x5?
___391,000___ (100,000)
Assuming that Silverman Company's ownership structure is as follows:
55% is needed to direct relevant activities:
15% ownership of Weights Company;
40% ownership of Treadmill Company;
10% ownership of Punchbag Company; and
Widely dispersed - other companies
What is the amount of Income from Investment in Silverman 's Company in
Weights financial records as of December 31, 20x5?
___569,000___ (10,500)
Assuming that Silverman Company's ownership structure is as follows:
50% is needed to direct relevant activities:
20% ownership of Weights Company;
30% ownership of Treadmill Company; and
10% ownership of Punchbag Company
Widely dispersed - other companies
What is the amount of Income from Investment in Silverman 's Company in
Weights financial records as of December 31, 20x5?
________ (40,000)
1 / 3 points
2. On July 1, 20x4, Joey Company acquired 30% of the shares of Leo Company
for P200,000. On that date the equity of Leo was P500,000 with all
identifiable assets and liabilities being measured at fair value. Profits/
(losses) made since the date of acquisition are as follows:
Year ended 30 June
20x5
20x6
20x7
20x8
20x9
Profit/(Loss)
P 30,000
(300,000)
(400,000)
15,000
30,000
There have been no dividends paid or movements in reserves since the date of
acquisition.
On June 30, 20x5 the equity method accounted balance of the investment in Lea
was:
___371,000___ (209,000)
On June 30, 20x7 the equity method accounted balance of the investment in Leo
was:
___0___(33.33 %)
At 30 June 20X8 the equity method accounted balance of the investment in Leo
was:
___0___ (3,500)
0 / 2 points
3. Aye Company purchases 40% of Cee Company on January 1 for P1,000,000
that carry voting rights at a general meeting of shareholders of Bee
Company. Aye Company are Bee Company immediately agreed to share
control (wherein unanimous consent is needed to all the parties involved)
over Cee Company. Cee reports assets on that date of P2,500,000 with
liabilities of P1,000,000. One building with a five-year life is undervalued on
Bee's books by P250,000. Also Cee's book value for its trademark (10-year
life) undervalued by P450,000. During the year, Cee reports net income of
P200,000, while paying dividends of P50,000. What is the Investment in Cee
Company balance (equity method) in Aye's financial records as of December
31?
___2,008,000___ (1,022,000)
The Income from Investment in Cee Company in Aye's financial records as of
December?
___1,028,000___ (42,000)
0 / 1 point
4. Ray Corporation purchased 25 percent of Dee Company's stock in January 2, 20x5 for
P800,000. At the acquisition date, Dee has equipment with a market value P180,000
greater than book value. The equipment has an estimated remaining life of 10 years.
In 20x5, Dee has net income of P320,000 and pays P100,000 of dividends. What is the
balance in the investment account on Ray's financial records at the end of 20x5?
___855,000___ (850,500)
0 / 8 points
5. Flower Corporation purchased 30 percent of Down Company's stock in
January 1, 20x5 for P1,500,000. At the acquisition date, Down has
equipment with a market value P500,000 greater than book value. On that
date, Flowers Corporation gives the ability to have joint control with another
entity over Down Company's. The equipment has an estimated remaining
life of 10 years. In 20x5, Down has net income of P250,000 and pays
P100,000 of dividends. What is the balance in the investment account on
Flower's financial records at the end of 20x5?
___1,650,000___ (1,530,000)
The income from investment in Flower's financial records at the end of 20x5:
___250,000___ (60,000)
Assuming the same information except that the Joint Venturer (investor] does not
prepare Consolidated Financial Statements:
The investment account in Flower's financial records at the end of 20x5;
___1,400,000___ (1,530,000)
The income from investment in Flower's financial records at the end of 20x5:
___1,000,000___ (60,000)
Assuming the same information except that the Joint Venturer (Investor) prepares
Consolidated Financial Statements:
The investment account in Flower's financial records at the end of 20x5:
___300,000___ (1,500,000)
The income from investment in Flower's financial records at the end of 20x5:
___250,000___ (30,000)
The investment account in the consolidated financial statements at the end of
20x5:
___100,000___ (1,530,000)
The income from investment in the consolidated financial statements at the end of
20x5:
___200,000___ (60,000)
1 / 1 point
6. Peter Inc. owns 40 percent of Wendy and applies the equity method. During
the current year, Peter buys inventory costing P89,000 and then sells its
Wendy for P145,000. At the end of the year. Wendy still holds only P36,250
of merchandise. What amount of unrealized gross profit must Peter defer in
reporting this investment using the equity method?
___5,600___
7.
1 / 1 point
Investor owns 35% of Investee and applies the equity method. In 20x2, Investor sells
merchandise costing P50,000 to Investee for P90,000. Investee's ending inventory
includes 45,000 purchased from Investor. What amount of unrealized gross profit
must be deferred in the equity method entry?
___7,000___
8.
1 / 1 point
Investor owns 30% of Investee and applies the equity method. In 20x2, Investee sell
merchandise costing P20,000 to Investor for P50,000. Investor's ending inventory
includes P10,000 purchased from Investee. What amount of unrealized gross must be
deferred in the equity method entry?
___1,800___
0 / 2 points
9. Apple Company has an investment balance amounting to P250,000 in the
voting shares of Pear Ltd. On December 31, 20x5 Pear reported a net income
of P1,000,000 and declared dividends of P500,000. During 20x5, Apple had
sales to Pear of P450,000, and Prince had sales to Apple of P250,000. On
December 31, 20x5, the inventory of Apple contained an intercompany
profit of P50,000, and the inventory of Pear contained an intercompany
profit of P75,000. On January 1, 20x5, Apple sold equipment to Pear and
recorded an profit of P100,000 on the transaction. The equipment had a
remaining useful life of five years on this date. Apple uses the equity method
to account for its investment in Pear. Apple owns 25% of Pear, and Pear is a
joint venture using equity method.
The investment account in Apple's financial records at the end of 20x5:
___550,000___ (348,750)
The investment income in Apple's financial records at the end of 20x5:
___50,000___ (223,750)
6.003 / 15 points
10.X Co. and Y Inc. formed XY Company on January 1, 20x4. X Co. invested
equipment with a carrying amount of P420,000 and a fair value of P980,000
for a 25% interest in XY Company, while Y Inc. contributed equipment, which
was similar to the equipment contributed by X Co., with a total fair value of
1,225,000, for a 60% interest in XY Company. The equipment has an
estimated useful life of 10 years. On December 31, 20x4, XY Company
reported a net income of P250,600. Assume that the transaction does not
have a commercial substance in this situation because X Co. owned a similar
portion of the same type of equipment both before and after the
contribution to the joint venture.
Determine the unrealized gain on transfer to XY Company (the separate vehicle) on
January 1, 20x4.
___560,000___(6.67 %)
Determine the realized gain through depreciation on transfer of equipment to XY
Company on December 31, 20x4.
___56,000___(6.67 %)
Determine the gain on transfer of equipment to be presented in the 20x4 income
statement,
___56,000___(6.67 %)
The same data are identical in all respects to those from previous problem except
that the Y Co. contributes technology (rather than equipment) with a fair value of
P1,225,000. Assume that the transaction does have commercial substance in this
situation because X Co. owned equipment before its contribution to the joint
venture but indirectly owned a portion of equipment and technology after the
contribution.
Determine the unrealized gain and realized gain on transfer to XY Company (the
vehicle) on January 1, 20x4 :
Unrealized gain on January 1, 20x4:
___224,000___ (140,000)
Realized gain on January 1, 20x4:
___336,000___ (420,000)
Determine the realized gain in income statement on transfer of equipment to XY
Company
on December 31, 20x4.
___22,400___ (434,000)
The same data facts are identical in all respects to those from previous problem
except that that X Co. receives a 25% interest in XY Company, plus P245,000 in cash
in return for investing equipment with a fair value of P980,000, while Y Inc.
contributed equipment with a for value of P806,400 plus cash of P245,000, for a
total contribution of P966,900.
Determine the immediate gain from selling equipment to X Inc. on January 1, 20x4.
___140,000___(6.67 %)
Determine the unrealized gain on transfer to XY Company (the separate vehicle) on
January 1, 20x4.
___420,000___(6.67 %)
Determine the realized gain through depreciation on transfer of equipment to XY
Company on December 31, 20x4.
___14,000___ (42,000)
Determine the gain on transfer of equipment to be presented in the 20x4 income
statement
___182,000___(6.67 %)
Using the same information, assume the increase in the amount of cash that X Co.
received when it invested equipment for a 25% interest in XY Company and the
cash received was P571,667. Because Y Inc. invested only P245,000 cash in the
joint venture, the additional P326,667 was borrowed by XY Company.
Determine the sales proceeds and the return of equity of X Company. (round up to
nearest whole number)
___408,333___ (490,000)
Determine the immediate gain from selling equipment to Y Inc. on January 1, 20x4.
(use rounded-up answer in previous question for the ratio)
___252,000___ (280,000)
Determine the unrealized gain on transfer to ST Company (the separate vehicle) on
January 1,20x4.
___308,000___ (280,000)
Determine the realized gain through depreciation on transfer of equipment to XY
Company on December 31, 20x4.
___30,800___ (28,000)
Determine the gain on transfer of equipment to be presented in the 20x4 income
statement.
___282,800___ (308,000)
Use the following Information for questions 1 to 4:
On January 1, 20x4, XX Company and YY Company signed an agreement to form a
joint operation to manufacture a product called plasma. This product is used in the
manufacturing of television. The following are transactions transpired in relation to
joint operations for 20x4:










To commence the operation, both operators contributed P252,000 in cash.
Contributions of cash by the operators.
Use of cash and loan to buy machinery & equipment costing P134,400 (cash paid,
P84,000 and the balance on a loan account) and raw materials purchase on account costing
P109,200.
Labor incurrence amounting to P120,960 with P131,600 paid in cash.
Loans from the bank, P100,800.
Repayment of loan - machinery and equipment, P16,800, raw materials amounting to
P70,560 and other factory expenses, of P218,400.
Depreciation of machinery and equipment, P13,440.
Transfer of materials, labor and overhead to Work-in-Process: payroll, P120,960;
Materials, P80,640; Factory overhead – heat, light and power, P218,400 and depreciation of
P13,440.
Transfer of Work-in-Process to Finished Goods Inventory, P302,400
Transfer of Finished Goods Inventory, P268,800 to Joint Operators throughout the year
Determine the ending balance in cash:
P0
P 80,640
P151,200
None of the above
Question 2
Determine the work in process ending balance amounted to:
P 117,600
P 131,040
P 433,440
1/1
point
None of the above
1/1
point
Question 3
The December 31, 20x4 total assets amounted to:
P263,760
P381,360
P394,800
None of the above
0/1
point
Question 4
The December 31, 20x4 XX's investment amounted to:
P235,200
P117,600
P252,000
None of the above
1/1
point
Question 5
AA Company and BB Company agreed to form a joint operation to offer health
services. To start the operation the joint operators agreed to contribute cash of
P300,000 each. The joint operation will record which of the following entries to
recognize this event?
DR Joint operator contributions
600,000
CR Cash
600,000
DR Cash
600,000
CR Joint operator contributions
600,000
CR Venturer's equity-AA
CR Venturer's equity-BB
CR Cash
300,000
300,000
600,000
CR Cash
600,000
CR AA-Joint operation contribution 300,000
CR BB-Joint operation contribution 300,000
1/1
point
Question 6
Cash contributed to a joint operation was used to purchase Equipment (P100,000)
and raw materials (P70,000). The following entry would be part of the
overall recording of these transactions:
DR Equipment
DR Raw materials
CR Cash
DR Work in progress
CR Joint operation capital
100,000
70,000
170,000
170,000
170,000
DR Cash
170,000
CR Contribution to joint operation
170,000
DR Cash
CR Equipment
CR Raw materials
170,000
100,000
70,000
Question 7
1/1
point
Three joint operators are involved in a joint operation that manufactures ships
chandlery. At the beginning of the year the joint operation held P50,000 in cash.
During the year the joint operation incurred the following expenses: Wages paid
P20,000. Overheads accrued P10,000. Additionally, creditors amounting to P40,000
were paid and the joint operators contributed P15,000 cash each to the joint
operation. The balance of cash held by the joint operation at the end of the year is:
P 5,000
P25,000
P 35,000
P 75,000
Question 8
Books of JOINT OPERATOR(S): Reporting Proportionate Share of the Assets,
Liabilities, Revenues, and Expenses of the Joint Operation
1/1
point
XX Company and YY Company formed a joint operation and share in the output of
the joint operation 60:40. The joint operation paid a management fee of P20 000 to
XX Company during the current period. The cost to XX Company of supplying the
management service was P14,000. XX Company records the management fee
revenue as follows:
CR Cash
DR Fee revenue
20,000
20,000
CR Cash
DR Fee revenue
14,000
14,000
CR Cash
DR Fee revenue
12,000
12,000
CR Cash
DR Fee revenue
8,000
8,000
1/1
point
Question 9
Company A and Company B formed a joint operation and share equally in the output
of the joint operation. The joint operation paid a management fee of P20,000 to
Company A during the current period. The cost to Company A of supplying the
management service was P14,000. Company A records the management fee revenue
as follows:
CR Cash
DR Fee revenue
20,000
20,000
CR Cash
DR Fee revenue
14,000
14,000
CR Cash
DR Fee revenue
6,000
6,000
CR Cash
DR Fee revenue
10,000
10,000
Question 10
1/1
point
Company A Limited and Company B Limited formed a joint operation and share in the
output of the joint operation 60:40. The joint operation paid a management fee of
P20,000 to Company A Limited during the current period. The cost to Company A
Limited of supplying the management service was P14,000. The amount of profit that
Company A Limited will recognise in relation to the provision of the management fee
to the joint operation is:
NIL
P2,400
P3,600
P6,000
1/1
point
Question 11
A joint operation holds Equipment with a carrying amount of P1,200,000. The two
joint operators participating in this arrangement share control equally. They also
depreciate Equipment using the straight-line method. The Equipment has a useful life
of 5 years. At reporting date each joint operator must recognize the following entry,
in relation to depreciation, in its records:
Depreciation, P240,000
Depreciation, P120,000
Investment in joint operation, P240,000
Assets in joint operation, P120,000.
1/1
point
Question 12
A 50:50 joint operation was commenced between two operators. Operator One
contributed cash of P50 000, and Operator Two contributed a building with a fair
value of P50,000 and a carrying amount of P40,000. Using the line-by-line method of
accounting, Operator Two would record:
DR Building in JO
CR Building
40,000
40,000
DR Building in JO
CR Building
CR Gain on sale of building
50,000
40,000
10,000
DR Investment in joint operation
50,000
DR Building
40,000
CR Gain on sale of building
10,000
DR Cash in JO
DR Building in JO
CR Building
CR Gain on sale of building
25,000
20,000
40,000
5,000
1/1
point
Question 13
A 60:40 joint operation was commenced between two participants. Participant One
contributed cash of P60,000, and Participant Two agreed to provide technical
services to the joint operation over a period of two years. The fair value of the
services was determined to be P40,000 and the cost to provide the services was
estimated to be P35,000. Using the line-by-line method of accounting, Operator Two
would record:
DR Cash in JO
CR Obligation to JO
30,000
30,000
DR Cash in JO
CR Obligation to JO
24,000
21,000
CR Profit on provisions of services
3,000
DR Cash in JO
CR Obligation to JO
24,000
24,000
DR Cash in Joint Operation
DR Receivable in JO
CR Obligation to JO
24,000
16,000
40,000
1/1
point
Question 14
Three joint operators agree to an arrangement in which they have an equal share in
an agricultural joint operation. The work undertaken in setting up the joint operation
cost P300,000 and each operator contributed in cash. Each operator will need to
recognize the following accounting entry:
DR Cost of joint operation product 300,000
CR Cash
300,000
DR Inventory in JO
CR Cash
100,000
100,000
DR Cash in JO
CR Cash
300,000
300,000
DR Cash in JO
100,000
CR Cash
100,000
1/1
point
Question 15
A 50:50 joint operation was commenced between two participants. Joint Operator
One contributed cash of P50 000, and Joint Operator Two contributed a Building with
a fair value of P50,000 Using the line-by-line method of accounting Joint Operator
One would record:
Building in JO
Cash
50,000
50,000
Cash in JO
Cash
50,000
50,000
Investment in joint operation
Cash
50,000
50,000
Cash in JO
Building in JO
Cash
25,000
25,000
50,000
Question 16
1/1
point
Use the following information for questions 16 and 17:
AA and BB have established the AB Joint Operation. AA has a 60% interest in the joint
operation and BB has a 40% interest.
A contributed an asset with a carrying amount of P90,000 and a fair value of
P120,000 and BB agreed to provide technical services to the joint operation over the
first two years of operations. The fair value of the technical services was agreed to be
P80,000 and the cost to provide the services was estimated at P65,000 at the
inception of the joint operation.
As part of its initial contribution, the journal entry for joint operator AA:
Debit against the Services Receivable in JO account of P32,000;
Debit against the Plant in JO account of P54,000;
Credit against the Plant of P120,000;
Credit against the Gain on Sale of plant of P18,000.
Question 17
1/1
point
As part of its initial contribution entry BB will record a:
Debit against the Services Receivable in JO account of P32,000;
Debit against the Plant in JO account of P36,000;
Credit against the Obligation to JO of P39,000;
Credit against the Gain on Provision of Services of P6,000.
1/1
point
Question 18
On July 1, 20x5, the Ears & Eyes Joint Operation was established. The two joint
operators participating in this arrangement, Ears and Eyes share control equally. Both
joint operators contributed cash to establish the joint operation. The joint operation
holds equipment with a carrying amount of P1,200,000. Both joint operators
depreciate equipment using the straight-line method and the depreciation is
regarded a cost of production. The equipment has a uselife of 5 years. At June 20,
20x6 Ears had sold all of the inventory distributed to it and Eyes had sold 50% of the
inventory distributed to it. At June 30, 20x6 Joint operator Eyes must recognize the
following entry, in relation to depreciation, in its records:
Dr. Depreciation expense
P240 000;
Dr. Accumulated depreciation
P120 000;
Dr. Inventory
Dr. Cost of goods sold
P 60 000;
P120 000.
1/1
point
Question 19
Use the following information for questions 19 to 21:
On July 1, 2015, Abel entered into a 50:50 joint operation with Cain to develop an oil
field off the coast of Aparri, Cagayan. Each operator's initial contribution was P2
million. Abel contributed P1 million cash and equipment with a fair value of P1
million and a book value of P500,000. Cain's contributed P2 million cash.
Additional information:

Production costs for the JO for the year ended June 30, 20x6 were:
Purchases
Wages
P'000
750
1,300
Management fee
Total production costs
Less: Work in progress
Cost of production




400
2,450
(650)
1,800
The remaining useful life of the equipment contributed by Abel is 5 years.
Cain is responsible for the day to day management of JO and has recognized the
management fee received during the year as revenue.
The costs of providing these management services to JO were P225,000.
Tasman has sold all of the oil distributed to it and Abel has sold 50% of the oil distributed
to it by June 30, 20x6.
An extract of JO's balance sheet at June 30, 20x6 shows: ('000)
Assets
Cash
Work in progress
Finished goods inventory
Plant & equipment
Accounts payable
Net assets
P650
650
100
1,000
(100)
P2,300
Which of the following will not form part of Abel's initial contribution entry?
Debit against the Cash in JO account of P1,500,000;
Debit against the Equipment in JO account of P500,000;
Credit against the Cash of P1,000,000
Credit against the Gain on Equipment of P250,000
Question 20
1/1
point
Cain's initial contribution entry will include a debit to the Cash in JO account of:
P1,000,000
P1,500,000
P2,000,000
P3,000,000
Question 21
1/1
point
The value of inventory distributed to Abel Ltd by the joint venture and subsequently
sold by June 30, 20x6 is:
P425,000
P850,000
P900,000
P1,700,000
1/1
point
Question 22
Use the following information for questions 22 to 24:
On January 1, 2021. Entity MM together with another joint operator set up a
separate vehicle to undertake a joint operation. The arrangement provides for both
parties to have joint control over the separate vehicle. For its capital contribution,
Entity MM has recorded its interest in the joint operation at P300,000, being the
amount of cash contribution upfront. Apart from recording its assets and liabilities in
the joint operation directly. Entity MM has rights to a 60% share in the property,
plant and equipment of the separate vehicle, a 50% share in the current assets, and a
75% share of the liabilities incurred by the separate vehicle. Its share of the revenue
from the sale of the output produced by the separate vehicle is 55%, while its share
of the expenses incurred jointly is 60%.
Extracts of the financial statements of the separate vehicle follows:
Revenue from the sale of outputs of the vehicle
Less: Expenses
Net income from operations
P1,000,000
600,000
P 400,000
Current assets
Property, plant and equipment
Total Assets
P 600,000
P1,000,000
P1,600,000
Liabilities
Capital
Net income from operations
Total liabilities and Capital
P 800,000
400,000
400,000
P1,600,000
Determine Entity MM's "Cash in Joint Operation interests in Joint Operation)" (credit
balance) arising from share in assets. liabilities, revenue and expenses:
P110,000
P 240,000
P420,000
Nil
Question 23
1/1
point
Determine Entity MM's "Cash in Joint Operation" (Interests in Joint Operation)"
ending balance:
P 190,000
P 540,000
P 820,000
Nil
Question 24
1/1
point
The share in net income/gross profit of Entity MM's amounted to:
P300,000
P240,000
P220,000
P190,000
Question 25
1/1
point
Use the following information for questions 25 and 26:
Because the scale of the project exceeded the capacity of entities MM and NN
individually they tendered jointly for a public contract with a government to
construct a motorway between wo cities. Following the tender process the
government awarded the contract jointly to entities MM and NN.
In accordance with the contractual arrangements entities MM and NN are jointly
contracted with the government for delivery of the motorway in return for
P19,600,000 (a fixed price contract). In 20x4, in accordance with the agreement
between entities MM and NN.



entities MM and NN each used their own equipment and employees in the construction
activity
entity MM constructed three bridges needed to cross rivers on the route at a cost of
P5.6 million
entity NN constructed all of the other elements of the motorway at a cost of PB.4
million. entities MM and NN shared equally in the P19,600,000 jointly invoiced to (and
received from) the government.
Determine the net income generated by Joint Operator - Entity MM:
P9,800,000
P5,600,000
P4,200,000
None of the above
Question 26
1/1
point
Determine the net income generated by Joint Operator - Entity NN:
P9,800,000
P8,400,000
P1,400,000
None of the above
Question 27
1/1
point
Use the following information for questions 27 to 29:
L Inc., M Co., and N Inc. sign an agreement to collectively purchase an oil pipeline and
to hire a
company to manage and operate the pipeline on their behalf. The costs involved in
running the pipeline and the revenue earned from the pipeline are shared by the
three parties based on their ownership percentage. All major operating and financing
decisions related to the pipeline must be agreed to by the three companies. The cost
of purchasing the pipeline was P70,000,000. The pipeline has an estimated 20-year
useful life with no residual value. The management fee for operating the pipeline for
20x4 was P14,000,000. Revenue earned from the pipeline in 20x4 was P23,100,000. L
invested P21,000,000 for a 30% interest.
Compute the share of L Inc. in the revenue of the joint operation for 20x4:
P 1,680,000
P 6,930,000
P14,000,000
P21,000,000
Question 28
0/1
point
Compute the share of L Inc. in the expenses of the joint operation for 20x4:
P1,050,000
P4,200,000
P5,250,000
P6,930,000
Question 29
1/1
point
Compute the share of L Inc. in the net income of the joint operation for 20x4:
P1,680,000
P6,930,000
P14,000,000
P21,000,000
Question 30
Use the following Information for questions 30 and 31:
1/1
point
On 1 January 20x4 entities MM, NN, OO, PP and QQ (the joint operators) jointly buy a
jet aircraft for P14,000,000 cash. The operators are the registered as equal joint
owners of the aircraft. They enter into an agreement whereby the aircraft is at the
disposal of each operator for 70 days each year. The aircraft is in maintenance for the
remaining days each year. The operators may decide to use the aircraft, or, for
example, lease it to a third party. Decisions regarding maintenance and disposal of
the aircraft require the unanimous consent of the operators. The contractual
arrangement is for the expected life (20 years) of the aircraft and can be changed
only if all of the operators agree. The residual value of the aircraft is zero.
In 20x4 the operators each paid P140,000 to meet the joint costs of maintaining the
aircraft (e.g., hangar rental and aviation license fees).
In 20x4 each operator also incurred costs of running the aircraft when they made use
of the aircraft (e. g., entity MM incurred costs of P70,000 on pilot fees, aviation fuel
and landing costs).
In 20x4 entity MM also earned rental income of P532,000 by renting the aircraft to
others
Determine the net income generated by Joint Operator - Entity MM:
P182,000
P322,000
P392,000
None of the above
Question 31
1/1
point
The net book value of property, plant and equipment Determine the net income
generated by Joint Operator - Entity MM:
P2,660,000
P2,590,000
P2,268,000
None of the above
Question 32
1/1
point
Use the following information for questions 32 to 35:
Instead of contributing cash for a 30% Interest in the pipeline, L contributed steel
pipes to be used by the company constructing the pipeline, L had manufactured the
pipes at a cost of P15,400.000. All parties to the contract agreed that the fair value of
these pipes was P21,000,000 and the fair value of the pipeline once it was completed
was P70,000,000. All other facts are the same as in the previous problem. The other
operators have a 70% interest in the joint operation.
Determine the realized gain upon the contribution of the steel pipes:
P 5,600,000
P 3,920,000
P 1,680,000
Zero
Question 33
1/1
point
Determine the unrealized gain upon the contribution of the steel pipes at year end:
P 5,600,000
P 3,920,000
P1,680,000
Zero
Question 34
Determine the amortization expense for the year 20x4:
P0
P 84,000
P 966,000
0/1
point
P1,050,000
1/1
point
Question 35
Determine the pipeline's net cost at the end of 20x4
P0
P19,320,000
P19,404,000
P21,000,000
1/1
point
Question 36
Books of JOINT OPERATION Entity- PARTNERSHIP in Nature
The Investment in joint operation accounts in the books of the joint operators, X, Y
and Z show the balances below, upon termination of the joint operation and
distribution of the profits:
Accounts
with
X
Y
Z
X
Dr (Cr)
P4,000
(6,500)
Y
Dr (Cr)
P2,500
(6,500)
Z
Dr (Cr)
P2,500
P4,000
-
Final settlement of the joint operation will require payments as follows:
X pays P2,500 to Z, and Y pays P4,000 to Z.
Z pays P2,500 to X, and P4,000 to Y.
Y pays P6,500 to X, and Z pays P2,500 to Y.
None of these.
Question 37
Use the following Information for questions 37 and 38:
The following information for the operations of joint operation is as follows:
1/1
point
Investment in Joint Operation (Anton Company)
20x4:
20x4:
11/6-Merchandise - Jose
P8,500
11/20-Cash Sales-Ampon
11/8-Merchandise-Deyro
7,000
11/20-Cash Sales-Ampon
11/10-Freight paid-Ampon 200
11/28-Merchandise-Deyro
11/12-Advertising-Ampon 150
12/8-Purchase-Ampon
3,500
12/14-Selling expense
400
P20,400
4,200
1,210
The operation agreement provided for the division of gains and losses among Jose,
Deyro and Ampon in the ratio of 2:3:5. The operation was to close as of December
31, 20x4
The total gain from the joint operation amounted to:
P 6,060.
P12,120.
P18,180.
Some other answer.
Question 38
1/1
point
As final settlement, Jose received in cash:
P6,060
P7,608
P8,080
P9,712
Question 39
1/1
point
Use the following information for questions 39 through 42:
On September 30, 20x4 Roxas, Silverio and Tan agreed on a joint operation to sell
their common stock shares of the Golden Copper Mines. Gains and losses are to be
shared in proportion to the contributed shares.
Roxas contributes 6,000 shares, which had cost him P42 a share; Silverio gave 10,000
shares which had cost P58 each and Tan 4,000 shares which had cost P62 per share.
The par value of the shares was P50 and when the operation began market value was
P40 a share. Tan was to manage the operation for a flat fee of P3,000 plus expenses.
On October 20 he sold 4,500 shares for P44 a share. On November 1, Golden Copper
distributed a stock dividend of 20%. Tan sold 5,000 shares, ex-stock dividend, on
November 5 for P25 a share. On November 15, Golden Copper paid a cash dividend
of P1 per share. On November 22, he said 6,000 shares for P28. On December 20, the
remainder of the shares was sold for P35 a share. Tan's expenses were P4,700.
The 20,000 shares contributed to the joint operation should be valued at:
P 800,000.
P1,000,000.
P1,080,000.
Some other answer.
Question 40
1/1
point
Assuming the joint operation is ended on December 31, the share of Roxas operation
in the loss of the operation would be:
P10,130.
P11,130.
P13,130.
Some other answer.
Question 41
1/1
point
If a distribution of proceeds is made on December 31, the share of Silverio would
amount to:
P374,650.
P378,500.
P381,450.
P385,300.
Question 42
1/1
point
Tan's loss on the disposition of his Investment in Golden Copper is:
P95,420.
P98,140.
P105,420.
P120,140.
Question 43
0/1
point
Use the following information for questions 43 and 44:
On July 1, 20x4, Andres, Bantug, and Carlos formed a joint operation for the sale of
merchandise. Andres was designated as the managing operator. Profits or losses are
to be divided as follows: Andres, 50%; Bantug, 25%; and Carlos, 25%. On October 1,
20x4, though the joint operation was still uncompleted, the operators agreed to
recognize profit or loss on the operation to date. The cost of inventory on hand was
determined at P25,000. The joint operation account has a debit balance of P15,000
before distribution of profit and loss. No separate books is maintained for the joint
operation and the operators record in their individual books operation transactions.
The joint operation profit or loss on October 1, 20x4 is:
P10,000 profit
P25,000 profit
P15,000 loss
No profit or loss
Question 44
0/1
point
The distribution of the operation profit (loss) on October 1, 20x4 to the operators
shall be as follows:
Andres, P5,000; Bantug, P2,500; and Carlos, P2,500.
Andres, P12,500; Bantug, P6.250; and Carlos, P6,250.
Andres, (P7,500); Bantug, (P3,750): and Carlos, (P3,750)
No distribution yet because operation is uncompleted.
Answer not given.
0/1
point
Question 45
Use the following information for questions 45 and 46:
Anson and Burgos are operators in a operation for the acquisition of construction
supplies of an auction. The two operators agreed to contribute cash of P20,000 each
to be used in purchasing the supplies and to share profits and losses equally. They
also agreed that each shall record his purchases, sales and expenses in his own
books.
Several months later, the two operators terminated the operation. The following data
relate to the operation activities:
Joint Operation account balance
Value of inventory taken
Expenses paid from Joint Operation cash
Anson
P16,000 Cr
600
800
Burgos
P18,400 Cr
2,200
1,800
The amount of joint operation sales is:
P77,000
P27,000
P34,400
None of these.
Question 46
In the final settlement, Anson would receive
1/1
point
P 2,000
P18,600
P38,000
None of these.
Question 47
1/1
point
Use the following information for questions 47 and 48:
Reyes and Santos formed a joint operation to acquire and sell a particular lot of
merchandise Reyes was to manage the operation and to furnish the capital, and the
operators were to share equal in any gain or loss. On June 10, 20x4, Santos sent
Reyes P10,000 cash, which was the merchandise purchased. On June 24, one half
merchandise was sold for P7,200 cash. Reyes paid the cost of delivering merchandise
to customers, which amounted to P260. No further transactions occurred on June 30,
20x4.
The profit (loss) of the operation for the period June 10-June 30, 20x4 is:
P1,820.
P1,950.
(P1,700).
Some other answer.
Question 48
1/1
point
On June 30, 20x4 after recognizing the profit (loss) on the uncompleted operation,
the account of Santos on the books of Reyes will show a debit (credit) balance of:
(P10,910).
(P10,975).
P10,850.
Some other answer.
1/1
point
Question 49
Use the following information for questions 49 and 50:
Joint Operation activities for M, N. and O having proved to be unprofitable, the joint
operators agree to dissolve the operation. Accounts with the operation and cooperators on the books of M, the managing joint operator, are as follows just before
dissolution and liquidation:
Joint Operation Cash
Joint Operation
N, Capital
O, Capital
Debit
P12,000
6,500
Credit
P14,500
6,500
The balance of joint operation assets on hand is sold by M for P3,500. M is allowed
special
compensation of P300 for winding up the operation: remaining profits or loss is
distributed equally.
The Joint Operation profit (loss) is:
P3,000.
P19,000.
(P3,000).
None of these.
Question 50
1/1
point
In the final settlement, N and O received:
N, P13,400; O, P5,400.
N, P10,500; O, P3,500.
N, P15,850; O, P7,850.
None of these.
Question 51
1/1
point
Use the following information for questions 51 and 52:
Al Benin and Rey Sucat formed à joint operation on January 1, 20x4 to operate two
stores to be managed by each operator. They agreed to contribute cash as follows:
Benin, P30,000; Sucat, P20,000. Profits and losses are to be divided in the capital
ratio. All the operation transactions are for cash, and the cash receipts and
disbursements of the venture during the four-month period, handled through the
operators' bank accounts, are as follows:
Receipts
Disbursements
Benin
P78,920
62,275
Sucat
P65,425
70,695
On April 30, 20x4, the remaining joint operation's non-cash assets in the hands of the
operators were sold for P60,000 cash. The operation was terminated and settlement
was made between Benin and Sucat.
The operation profit (loss) for the four-month period, after selling the remaining noncash assets, was
P11,375.
P21,375.
(P31,375)
(P38,625)
None of these.
Question 52
1/1
point
The P60,000 cash was divided between the two operators in the following manner:
Benin, P16,180; Sucat, P43,820.
Benin, P21,905; Sucat, P38,095.
Benin, P26,180; Sucat, P33,820.
None of these.
Question 53
1/1
point
The books of three joint operators contain the following account balances:
N's Books
Account with N
Account with O
Account with P
O's Books
P2,000 Cr
5,000 Dr
P's Books
P2,000 Cr
3,000 Cr
P3,000 Cr
P5,000 Dr
When P makes final settlement of the operation, the entries are:
a.
b.
c.
d.
e.
N's Books
Debit
P
P5,000
Credit
O
3,000
Cash
2,000
Debit
Cash
P2,000
O
3,000
Credit
P
5,000
Debit
P
P5,000
Credit
Cash
3,000
O
2,000
Debit
Cash
P2,000
O
3,000
Credit
P
5,000
None of the above
N
P
Cash
Cash
N
P
N
P
Cash
N
P
Cash
O's Books
P5,000
2,000
3,000
P2,000
3,000
5,000
P5,000
3,000
2,000
P2,000
3,000
5,000
P's Books
Cash
N
O
N
O
Cash
Cash
N
O
N
O
Cash
P5,000
2,000
3,000
P3,000
2,000
5,000
P5,000
3,000
2,000
P2,000
3,000
5,000
V, W, X, Y and Z each hold a 20% interest in entity . Decisions in entity J need to be
approved by 80% vote of the parties. Is Entity J jointly controlled?
Yes, since all five parties have equal interest.
Yes, since four out of five parties need to give their consent.
No, but the five parties have significant influence.
No, the five parties neither have control nor significant influence
Question 2
0/1
point
MNO Co.'s articles of association require a 75% majority to approve decisions
regarding the relevant activities of the entity. It also outlines that each shareholder
is entitled to vote in proportion to their respective ownership interests.
Shareholder M and N have 51% and 30% of the voting stock of MNO Co.
respectively while various other investors hold the rest. Is MNO Co. jointly
controlled?
No, M has sole control and N has significant influence.
Yes, all the parties have joint control.
Yes, M and N have joint control.
No, both M and N have significant influence.
Question 3
1/1
point
Four separate space technology companies form a consortium to jointly
manufacture a space craft. A consortium agreement is signed, which outlines the
activities of the arrangement and establishes a joint operating committee. A
representative from each company sits on the joint operating committee; decisions
are made by unanimous consent.
Each company carries responsibility for different areas of expertise such as
propulsion, control boards, antennae and radiation-hardened parts. The companies
carry out different parts of the manufacturing process, each using its own
resources and expertise in order to manufacture market and distribute the aircraft
jointly.
The four companies share the revenues from the sale of the spacecraft and jointly
incur expenses. The revenues and common costs are shared as contractually
agreed in the consortium agreement.
A separate bank account is established through which revenue is received and
shared costs paid. The bank account is in the name of the four parties trading as
the consortium.
Each company also incurs their own separate costs such as labor costs,
manufacturing costs, supplies, inventory of unused parts and work in progress.
Each company recognizes their separately incurred costs in full.
What is the classification of the joint arrangement?
Joint operation, since each company has direct rights to the assets and
obligations for the liabilities of the arrangement.
Joint venture, since the arrangement is structured through a separate
vehicle.
Joint operation, since the arrangement is not structured through a
separate vehicle.
Joint venture, since each company has rights to the net assets of the
arrangement.
Question 4
0/1
point
A mining company (Gaia) is seeking to establish operations in a relatively
undeveloped country. The in-country requirements do not allow a local entity with
a mining license to be controlled by a foreign company.
Gaia establishes a separate company with a local investor to allow Gaia to enter
this market. The legal form of the company confers the rights to the assets and
obligations for liabilities to the company itself.
A shareholders' agreement is also established between and the local investor that
requires all decisions to be made jointly. The arrangement also confirms:


The assets of the arrangement are owned by the company. Neither party will be able
to sell, pledge, transfer or otherwise mortgage the assets.
The liability of the parties is limited to any unpaid capital.

Profits of the company will be distributed to Gaia and the investor 60/40, being the
parties' interest in the arrangement respectively.
What is the classification of the joint arrangement?
Joint operation, since each company are co-owners of the assets and
co-debtors of the liabilities of the arrangement.
Joint operation, since the arrangement itself owns the assets and
bears the liabilities of the arrangement.
Joint venture, since the arrangement is structured through a
separate vehicle.
Joint venture, since each company has rights to the net assets of the
arrangement.
1/1
point
Question 5

Which of the following statement(s) is/are true, according to PFRS 11?

PFRS 11 applies to all entities that are party to a joint arrangement.

The legal structure of an arrangement is the most significant factor in determining the
accounting.

There are now only two forms of joint arrangement – joint operations and joint
ventures.

Equity method of accounting should be used in joint ventures.
II, III and IV only
I, III and IV only
I, II, III and IV
I and II only
Question
6
0/3
points
On January 1, 2020 , A, B, and C (all are corporations) establish a joint undertaking
to manufacture a product they agree to share equally. Each will contribute
P150,000 into the operation; A and B are to contribute cash while C is to contribute
equipment with a carrying value of 175,000 and fair value of P150,000. The
equipment has a remaining life of 15 years when contributed. The difference
between the fair value and carrying value represents a reduction in the net
realizable value of the equipment contributed i.e., loss is recognized in full by C.
(1) Determine the net amount C will show the Equipment in JO account in its balance sheet
at January 1, 2020.
___150,000___ (50,000)
(2) Determine the net amount C will show the Equipment in JO account in its balance sheet
at December 31, 2020.
___140,000___ (46,666.67)
(3) Determine the net amount A (or B) will show the Equipment in JO account in its balance
sheet at December 31, 2020.
___0___ (46,666.67)
0 / 3 points
W, X, Y, and Z are joint operators of Joint Operation WXYZ (each having an equal
share in interest). On January 1, 2020, A sells equipment having a book value of
P65,500 to the OPERATION for P98,250. The equipment had an estimated useful
economic life of 10 years at that date.
(1) Determine the net amount A (or B) will show the Equipment in JO account in its balance
sheet at January 1, 2020. (Hint: Share in FV of asset less unrealized gain)
___65,500___ (16,375)
(2) Determine the net amount C will show the Equipment in JO account in its balance sheet
at December 31, 2020. (Hint: Share in FV of asset less depreciation less unamortized
unrealized gain)
___58,950___ (14,737.50)
(3) Determine the net amount A (or B) will show the Equipment in JO account in its balance
sheet at December 31, 2020. (Hint: Share in FV of asset less depreciation
___91,700___ (22,106.25)
0 / 1 point
In December 2020, Kiki and Lala contribute P6,000 each to buy and chocolates during
Valentines and divide profits in the ratio of 4:6, respectively. Cash purchases amount to
P5,000, expenses are P1,400 and cash sales are P12,000. The unsold fruits are taken by Kiki
and are charged to him for P600 or 40% of cost. How much is the net income of the joint
operation?
___18,200___ (6,200)
0 / 3 points
Teresa and Gabriela in a joint operation, contributed P35,000 each in order to
purchase merchandise which were sold in lots at a closing-out sale. They agree to
divide their profits equally and each shall record her purchases, sales and expenses
in her own books. After almost all merchandise had been sold, they wind up their
operation.
The following are the venture transactions:
Teresa
P35,000
1,500
(25,000)
800
Purchases of merchandise
Expenses paid from JT Operation Cash
JT Operation credit balances
Undisposed merchandise upon termination of JO
Gabriela
P35,000
2,000
(20,000)
1,200
All transactions for the joint venture are in cash. The operators are to take over the
unsold merchandise at cost.
(1) Calculate the net profit of the joint operation undertaking.
___71,500___ (47,000)
(2) Compute the amount of sales of the joint operation.
___68,000___ (117,000)
(3) Determine the amount of cash Gabriela would receive/(pay) from/to Teresa upon final
cash settlement by the venturers.
___15,800___ (4,700)
0 / 3 points
Lovely and Pretty in a joint operation, contributed P28,000 each in order to
purchase canned goods which were sold by lots at a closing-out sale. They agreed
to divide their profits equally and each shall record his purchases, sales and
expenses in her own books. After selling almost all the canned goods, they wind up
their operation. The following are the operation transactions:
Joint Operation credit balances were Lovely (P17,600) and Pretty (P15,400).
Expenses paid from Joint Operation cash were P3,600 by Lovely and P4,120 by
Pretty. Cost of unsold canned goods which Lovely and Pretty agreed to assume
were P660 and P1,040 respectively. (Hint: Net profit is balancing figure of
Investment in JO balance and cost of unsold merchandise.)
(1) Net profit of the joint operation was:
___62,500___ (34,700)
(2) Total sales of the joint operation were:
___54,300___ (96,720)
(3) In the final settlement, the amount due to Lovely including her investment was:
___9,740___ (44,690)
1 / 1 point
F, G and H formed a joint operation. F is to act as manager and is designated to
record the joint operation transactions in his books. As manager, F is allowed a
management fee of P12,000. Profits and losses are to be divided equally. The
following balances appear at the end of 2020 before adjustments for venture
inventory and distribution of profits and losses:
Joint operation cash
G, capital
H, capital
Debit
P48,000
3,000
Credit
P27,000
The operation is terminated on December 31, 2020 with unsold merchandise
costing P10,400.
Assuming that the joint operation profit is P5,000, what is the unadjusted balance of the joint
operation account before the distribution of profit? (Indicate whether debit or credit after
the amount)
___5,400 debit___
1 / 1 point
A, B, and C formed a joint operation to sell fruits during the Christmas season. The
following joint operation account reflects the transactions of the venture in the
books of manager A.
Joint Operation
2017
Nov. 5 Merchandise – C
17 Merchandise – B
22 Freight in -- A
Dec. 3 Purchases – A
13 Expenses -- A
P12,750 Nov. 18 Cash sales – A
10,500 Dec. 12 Cash sales – A
525
28 Merchandise -- B
5,250
600
P30,600
6,300
1,815
The contractual arrangements include distribution of gains and losses as follows: A,
50%; B, 30%; and C, 20%. The operation is completed and terminated on December
31, 2019.
How much should B receive in the final settlement?
___11,412___
1 / 1 point
Which of the following statements define a joint arrangement?
All of the above
B and C
A joint arrangement is an arrangement of which one party has joint control
A joint arrangement is an arrangement of which two parties have joint
control
A joint arrangement is an arrangement of which more than two parties
have joint control
Question 2
1/1
point
Which of the following is correct?
All joint arrangements which are not structured through a separate
vehicle are classified as joint ventures
In considering the legal form of the separate vehicle, if the legal form
establishes rights to individual assets and obligations, the arrangement
is a joint operation. If the legal form establishes rights to the net assets
of the arrangement, then the arrangement is a joint venture.
Where the joint operators have designed the joint arrangement so that
its activities primarily aim to provide the parties with an output it will
be classified as a joint venture.
For a joint venture, the rights pertain to the rights and obligations
associated with individual assets and liabilities, whereas with a joint
operation, the rights and obligations pertain to the net assets.
Question 3
1/1
point
Which of the following statement(s) is/are false, with regards to the concept of
"joint control" under PFRS 11?
I. Joint control is defined as the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities
require the majority consent of the parties sharing control.
II. No single party to an agreement is able to act unilaterally to control the
activity of the arrangement when joint control exists.
III. The existence of joint control means that every party to the arrangement
will have joint control.
IV. Joint control and control are mutually exclusive.
II and III only
I and III only
I and IV only
III and IV only
Question 4
0/1
point
MNO Co.'s articles of association require a 75% majority to approve decisions
regarding the
relevant activities of the entity. It also outlines that each shareholder is entitled to
vote in proportion to their respective ownership interests. Shareholder M and N
have 51% and 30% of the voting stock of MNO Co. respectively while various other
investors hold the rest. However, shareholder M has an option to buy shareholder
N's shares in MNO Co. The option may be exercised by shareholder M at any time
in the event that shareholder M and M do not agree on a decision regarding the
relevant activities. The option price is not remote. Is MNO Co. Limited jointly
controlled?
No, M has sole control and N has significant influence.
Yes, M and N have joint control.
Yes, all the parties have joint control.
No, both M and N have significant influence.
Question 5
1/1
point
A mining company (Gaia) is seeking to establish operations in a relatively
undeveloped country. The in-country requirements do not allow a local entity with
a mining license to be controlled by a foreign company.
Gaia establishes a separate company with a local investor to allow Gaia to enter
this market. The legal form of the company confers the rights to the assets and
obligations for liabilities to the company itself.
A shareholders' agreement is also established between and the local investor that
requires all decisions to be made jointly. The arrangement also confirms:



The assets of the arrangement are owned by the company. Neither party will be able
to sell, pledge, transfer or otherwise mortgage the assets.
The liability of the parties is limited to any unpaid capital.
Profits of the company will be distributed to Gaia and the investor 60/40, being the
parties' interest in the arrangement respectively.
What is the classification of the joint arrangement?
Joint venture, since each company has rights to the net assets of the
arrangement.
Joint venture, since the arrangement is structured through a separate
vehicle.
Joint operation, since the arrangement itself owns the assets and
bears the liabilities of the arrangement.
Joint operation, since each company are co-owners of the assets and
co-debtors of the liabilities of the arrangement.
3/3
points
Question
6
On January 1, 2020 , A, B, and C (all are corporations) establish a joint undertaking
to manufacture a product they agree to share equally. Each will contribute
P150,000 into the operation; A and B are to contribute cash while C is to contribute
equipment with a carrying value of 175,000 and fair value of P150,000. The
equipment has a remaining life of 15 years when contributed. The difference
between the fair value and carrying value represents a reduction in the net
realizable value of the equipment contributed i.e., loss is recognized in full by C.
(1) Determine the net amount C will show the Equipment in JO account in its balance sheet
at January 1, 2020.
___50,000___(33.33 %)
(2) Determine the net amount C will show the Equipment in JO account in its balance sheet
at December 31, 2020.
___46,666.67___(33.33 %)
(3) Determine the net amount A (or B) will show the Equipment in JO account in its balance
sheet at December 31, 2020.
___46,666.67___(33.33 %)
0 / 3 points
W, X, and Y are joint operators of Joint Operation WXY (each having an equal share
in interest). On January 1, 2020, W sells equipment having a book value of P60,000
to the OPERATION for P90,000. The equipment had an estimated useful economic
life of 15 years at that date.
(1) Determine the net amount W will show the Equipment in JO account in its balance sheet
at January 1, 2020. (Hint: Share in FV of asset less unrealized gain)
___15,000___ (20,000)
(2) Determine the net amount W will show the Equipment in JO account in its balance sheet
at December 31, 2020. (Hint: Share in FV of asset less depreciation less unamortized
unrealized gain)
___14,000___ (18,666.67)
(3) Determine the net amount X (or Y) will show the Equipment in JO account in its balance
sheet at December 31, 2020. (Hint: Share in FV of asset less depreciation
___21,000___ (28,000)
1 / 1 point
In December 2020, Kiki and Lala contribute P8,000 each to buy and chocolates during
Valentines and divide profits in the ratio of 4:6, respectively. Cash purchases amount to
P7,000, expenses are P2,300 and cash sales are P15,000. The unsold fruits are taken by Kiki
and are charged to him for P800 or 80% of cost. How much is the net income of the joint
operation?
___6,500___
1 / 3 points
Teresa and Gabriela in a joint operation, contributed P40,000 each in order to
purchase merchandise which were sold in lots at a closing-out sale. They agree to
divide their profits equally and each shall record her purchases, sales and expenses
in her own books. After almost all merchandise had been sold, they wind up their
operation.
The following are the venture transactions:
Teresa
Purchases of
merchandise
Expenses
paid from JT
Operation
Cash
JT Operation
credit
balances
Undisposed
merchandise
upon
termination
of JO
All transactions for the joint venture are in cash. The operators are to take over the
unsold merchandise at cost.
(1) Calculate the net profit of the joint operation undertaking.
___68,000___(33.33 %)
(2) Compute the amount of sales of the joint operation.
___150,500___ (129,500)
(3) Determine the amount of cash Gabriela would receive/(pay) from/to Teresa upon final
cash settlement by the venturers.
___72,000___ (2,000)
3 / 3 points
Lovely and Pretty in a joint operation, contributed P25,000 each in order to
purchase canned goods which were sold by lots at a closing-out sale. They agreed
to divide their profits equally and each shall record his purchases, sales and
expenses in her own books. After selling almost all the canned goods, they wind up
their operation. The following are the operation transactions:
Joint Operation credit balances were Lovely (P15,500) and Pretty (P12,400).
Expenses paid from Joint Operation cash were P2,900 by Lovely and P3,800 by
Pretty. Cost of unsold canned goods which Lovely and Pretty agreed to assume
were P450 and P900 respectively. (Hint: Net profit is balancing figure of Investment
in JO balance and cost of unsold merchandise.)
(1) Net profit of the joint operation was:
___29,250___(33.33 %)
(2) Total sales of the joint operation were:
___84,600___(33.33 %)
(3) In the final settlement, the amount due to Lovely including her investment was:
___39,175___(33.33 %)
0 / 1 point
F, G and H formed a joint operation. F is to act as manager and is designated to
record the joint operation transactions in his books. As manager, F is allowed a
management fee of P10,000. Profits and losses are to be divided equally. The
following balances appear at the end of 2020 before adjustments for venture
inventory and distribution of profits and losses:
Joint operation cash
G, capital
H, capital
Debit
P40,000
2,000
Credit
P20,000
The operation is terminated on December 31, 2020 with unsold merchandise
costing P750.
Assuming that the joint operation profit is P3,000, what is the unadjusted balance of the joint
operation account before the distribution of profit? (Indicate whether debit or credit after
the amount)
___2,250 debit___ (2,250 credit)
1 / 1 point
A, B, and C formed a joint operation to sell fruits during the Christmas season. The
following joint operation account reflects the transactions of the venture in the
books of manager A.
Joint Operation
2017
Nov. 5 Merchandise – C
17 Merchandise – B
22 Freight in -- A
Dec. 3 Purchases – A
13 Expenses -- A
P10,250 Nov. 18 Cash sales – A
8,200 Dec. 12 Cash sales – A
310
28 Merchandise -- B
4,120
450
P25,700
4,200
950
The contractual arrangements include distribution of gains and losses as follows: A,
40%; B, 35%; and C, 25%. The operation is completed and terminated on December
31, 2019.
How much should B receive in the final settlement?
___9,882___