A 50:50 Joint Operation Was Commenced Between Two Participants

question 20

Multiple Choice

A 50:50 joint operation was commenced between two participants. Mary Company contributed cash of $90 000, and Strickland Company contributed a Building with a fair value of $90 000 and a carrying amount of $75 000. Using the line-by-line method of accounting, Strickland Company would record:

• A) DR Building in JO $75 000 CR Building $75 000
• B) DR Building in JO $945000 CR Building $37 500
• CR Gain on sale of building $7 500
• C) DR Investment in joint operation $45 000 CR Building $37 500
• CR Gain on sale of building $7 500
• D) DR Cash in JO $45 000 DR Building in JO $45 000
• CR Building $75 000
• CR Gain on sale of building $15 000

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Definitions:

Disease Exacerbations

Episodes where symptoms of a chronic condition become worse or more severe.

Palliative Care

Specialized medical care focused on providing relief from the symptoms and stress of a serious illness, aiming to improve quality of life for both the patient and their family.

Acute Care

Short-term treatment provided in hospitals for patients suffering from severe injury or illness, an urgent medical condition, or during recovery from surgery.

Chronic Disease

A long-lasting condition that can be controlled but not cured.