A 50:50 Joint Operation Was Commenced Between Two Participants $\begin{array}{llll}\text { DR } & \text { Building in JO } & \$ 40,000 \\ \text { CR } & \text { Building } & \$ 40,000\end{array}$

question 17

Multiple Choice

A 50:50 joint operation was commenced between two participants. Participant One contributed cash of $50 000, and Participant Two contributed a Building with a fair value of $50 000 and a carrying amount of $40 000. Using the line-by-line method of accounting, Participant Two would record:

• A) \(\begin{array}{llll}
• \text { DR } & \text { Building in JO } & \$ 40,000 \\
• \text { CR } & \text { Building } & \$ 40,000
• \end{array}\)
• B) \(\begin{array} { l l l l }
• \text { DR } & \text { Building in JO } & \$ 50,000 & \\
• & \text { CR } & \text { Building } & \$ 40,000 \\
• & \text { CR } & \text { Gain on sale of building } & \$ 10,000
• \end{array}\)
• C) \(\begin{array}{lll}\text { DR}&\text { Investment in joint operation } & \$ 50,000\\
• \text { CR } & \text { Building } & \$ 40,000 \\
• \text { CR } & \text { Gain on sale of building } & \$ 10,000
• \end{array}\)
• D)\(\begin{array}{lll}
• \text { DR } & \text { Cash in JO } & \$ 25,000 \\
• \text { DR } & \text { Building in JO } & \$ 20,000\\
• \text { CR } & \text { Building } & \$ 40,000 \\
• \text { CR } & \text { Gain on sale of building } & \$ 10,000
• \end{array}\)

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