2. Tom and Jerry are joint operators sharing profits and losses equally.

The parties appoint Jerry as

the custodian of the joint operation’s assets. The joint operation’s transactions during the year are
as follows:
a. Jerry transfers inventory costing P 400 to the joint operation.
b. Tom contributes cash of P 500 to the joint operation, subject to liquidation by Jerry. 
c. Jerry purchases additional inventory of P200 using the joint operation’s cash.
d. Jerry sells inventory costing for P 900 cash.
e. Jerry pays expenses of P100 using the joint operation’s funds.
f. Unsold inventory at year-end amounts to P 100.

       Requirements:
       Case # 1: No separate books
a. Prepare journal entries for transactions (a) to (e) above assuming no separate books are
maintained for the joint operation (the parties use the “joint operation” operation account to
record the joint operations transactions).
b. Compute for the profit or loss of the joint operation using the “joint operation” t-account.
c. If the joint operation is terminated at year-end, how much cash will be distributed to Tom and
Jerry, respectively? Assume Jerry takes the unsold inventory and Tom gets back the unused cash
of P 200 (P500 contribution – P 200 used for purchases – P100 paid for expenses). Reconcile the
cash distribution to the joint operators with the joint operation’s cash balance. 
d. Provide the entries to (g) charge the unsold inventory to Jerry; (h) charge the unused cash
distribution to Tom; (i) record the joint operator’s respective shares in the profit; and (j) cash
distribution to the joint operators. 
e. Provide T-account analyses on the closing of personal accounts, Joint operation account, and JO-
cash account.

Problem ccto