A 60:40 Joint Operation Was Commenced Between Two Participants

question 11

Multiple Choice

A 60:40 joint operation was commenced between two participants. Andrews Limited contributed cash of $90 000, and Michaels Limited contributed a Building with a fair value of $60 000. Using the line-by-line method of accounting, Andrews Limited would record which of the following entries?

• A) DR Building in JO $90 000 CR Cash $90 000
• B) DR Cash in JO $90 000 CR Cash $90 000
• C) DR Cash in JO $54 000 DR Building in JO $36 000
• CR Cash $90 000
• D) DR Investment in joint operation $90 000 CR Cash $90 000

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Definitions:

Proportionate Increases

Situations where variables increase by the same percentage, maintaining their relative proportion to one another.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a specified time period.

Agricultural Products

Goods produced through farming and agriculture, such as crops and livestock.

Labor Force

The total number of people employed or actively seeking employment in a country or specific economic sector.