The Following Information Relates to Questions

question 5

Multiple Choice

The following information relates to Questions
A Ltd and B Ltd have established the AB Joint Operation. A Ltd has a 60% interest in the joint operation and B Ltd has a 40% interest.

A Ltd contributed an asset with a carrying amount of $90,000 and a fair value of $120,000 and B Ltd agreed to provide technical services to the joint operation over the first two years of operations. The fair value of the technical services was agreed to be $80,000 and the cost to provide the services was estimated at $65,000 at the inception of the joint operation.

-As part of its initial contribution entry A Ltd will record a:

• A) Debit against the Services Receivable in JO account of $32,000;
• B) Debit against the Plant in JO account of $54,000;
• C) Credit against the Plant of $120,000;
• D) Credit against the Gain on Sale of Plant of $18,000.

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Definitions:

Informal Rulemaking

A process used by federal agencies to create regulations through a less formal method, typically involving the publication of a proposed rule and soliciting public comment.

Public Comment

Public comment is a period offered by governmental bodies during decision-making processes where members of the public can voice their opinions, feedback, or concerns on proposed actions, regulations, or policies.

Environmental Impact Statement

A document outlining the significant effects a proposed project might have on the environment, required in some jurisdictions for major projects.

Irreversible Commitments

Refers to decisions or agreements that cannot be undone or easily reversed.