Have Ltd,Ay Ltd and Go Ltd Contractually Form a Joint

question 64

Multiple Choice

Have Ltd,Ay Ltd and Go Ltd contractually form a joint operation on 1 July 2013 to undertake a bauxite mining venture.The three companies agree to contribute the following amounts of capital to the joint operation in the same proportion as their rights to the assets and outputs: $$\begin{array} { | l | r | r | } \hline \text { Have Ltd } & \$ 40000000 & 40 \% \\\hline \text { Ay Ltd } & \$ 35000000 & 35 \% \\\hline \text { Go Ltd } & \$ 25000000 & 25 \% \\\hline & \$ 100000000 & 100 \% \\\hline\end{array}$$ The funds are used on 1 July 2013 to purchase the mining site for $50 million and drilling and other heavy machinery for $25 million.The balance of $25 million will be called on by the joint operation manager as required.
The following information relates to the year ending 30 June 2014:
Total cost of production of $10 000 000.These costs have been deferred in order to amortise them as mining commences.
Of the total costs of production all but $3 000 000 have been paid in cash.
The joint operation manager called on the joint operators to contribute a further $12 000 000 in total with each joint operator contributing the appropriate portion according to their share in the joint operation (provided above) .
What entries would be required to record the formation of the joint operation and the transactions for the year ended 30 June 2014?

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Definitions:

Ordinal Scale

The scale of measurement for a variable if the data exhibit the properties of nominal data and the order or rank of the data is meaningful. Ordinal data may be nonnumeric or numeric.

Interval Scale

The scale of measurement for a variable if the data demonstrate the properties of ordinal data and the interval between values is expressed in terms of a fixed unit of measure. Interval data are always numeric.

Ratio Scale

The scale of measurement for a variable if the data demonstrate all the properties of interval data and the ratio of two values is meaningful. Ratio data are always numeric.

Nominal Scale

The scale of measurement for a variable when the data are labels or names used to identify an attribute of an element. Nominal data may be nonnumeric or numeric.