Three Joint Operators Agree to an Arrangement in Which They

question 25

Multiple Choice

Three joint operators agree to an arrangement in which they have an equal share in a manufacturing joint operation. The work undertaken in setting up the joint operation cost $600 000 and each operator contributed in cash. Each operator will need to recognise which of the following accounting entries?

• A) DR Work in progress in JO $600 000 CR Cash $600 000
• B) DR Inventories in JO $200 000 CR Cash $200 000
• C) DR Cash in JO $600 000 CR Cash $600 000
• D) DR Cash in JO $200 000 CR Cash $200 000