JOINT ARRANGEMENTS

TRUE OR FALSE
1. 1
2. 0 only the parties that havejoint control
3. 1
4. 0 rights and obligations - joint operation
5. 1
6. 0 joint operation
7. 0 joint operators
8. 0
9. 0 line by line consolidation
10. 0 deduction from the investment

MULTIPLE CHOICE - THEORIES

1. C
2. C
3. A
4. B
5. D
6. D
7. B
8. C
9. C
10. B
Tech Co revenue 1,000,000.00
Share in Robotics Co Sales
(400,000/2) 200,000.00

TOTAL REVENUE 1,200,000.00 (B)

 JOINT OPERATION

Merchandise - A 8,500.00 20,400.00

Merchandise - B 7,000.00 4,200.00
Frieght In - C 200.00 1,210.00
Purchases - C 3,500.00 540.00
Selling Expenses - C 550.00

19,750.00 26,350.00

6,600.00 PROFIT

Unsold Merchandise - A 540.00 8,500.00

1,320.00

540.00 9,820.00

9,280.00 CASH SETTLEMENT

(A)
 Cash Sales - C
Cash Sales - C
Merchandise - B
Unsold Merchandise - A

(B)

Merchandise - A
Share in Profit
(6,600 x 2/10)

CASH SETTLEMENT
 JOINT OPERATION

Contributions
(100+120+80) 300.00 900.00 SALES - squeezed
(C)
Expenses 240.00

Balance before closing 360.00

(580-120-100)

JOINT OPERATION

Contributions
(100+120+80) 300.00 900.00 Sales
Expenses 240.00 60.00 Unsold Merchandise - Difficult

540.00 960.00

420.00 Profit before salaries and bonus

6.00 Salaries
414.00 Profit after salaries and before bonus
54.00 bonus (414 / 115% x 15%)
360.00 PROFIT AFTER SALARIES AND BONUS

DIFFICULT

Unsold Inventory 60.00 80.00 Contribution

6.00 Salaries
54.00 Bonus
120.00 Share in Profit (360/3)

60.00 260.00
200.00 NET SHARE IN CASH SETTLEMENT
(B)
SALES - squeezed

Unsold Merchandise - Difficult

Profit before salaries and bonus

Profit after salaries and before bonus

bonus (414 / 115% x 15%)
PROFIT AFTER SALARIES AND BONUS

Contribution

Share in Profit (360/3)

NET SHARE IN CASH SETTLEMENT
 JOINT OPERATION

Purchases A 100.00 120.00 Sales A

Purchases B 80.00 60.00 Sales B
Expenses 200.00 10.00 Other Income B

380.00 190.00

(190.00) Loss in JO
Less:
24.00 Commision on Sales A
12.00 Commision on Sales B
10.00 Comm on Purchases A
8.00 Comm on Purchases B
(244.00) TOTAL LOSS IN JO

Loss Allocation: A

Commission on Sales 24
Commission on Purchases 10
Loss (244/2) (122)
NET SHARE IN LOSS (88)

Purchases 100.00 120.00 Sales

Expenses 200.00 88.00 Share in Loss

300.00 208.00

CASH SETTLEMENT 92.00

RECEIPT

B
Purchases 80.00 60.00 Sales
Expenses - 102.00 Share in Loss
10.00 Other Income B

80.00 172.00

92.00 CASH SETTLEMENT

PAYMENT

THEREFORE, B WILL PAY A CASH OF P92 (B)

 B

12
8
(122)
(102)
 JOINT OPERATION

Ending Balance (15-10) 5.00 17.00 UNSOLD INVENTORY - squeezed (D)

12.00 Profit (4 x 3)
 JOINT OPERATION

BALANCE - squeezed 7.00 18.00 Unsold inventory

(A)

11.00 Profit
 JOINT OPERATION

Account with A 4.00 14.00 Account with B

Account with B 12.00 22.00 Unsold inventory

16.00 36.00

20.00 PROFIT IN JO
2.00 Bonus to A (20 x 10%)
18.00 Profit allocated to Joint operators

Unsold inventory 22.00 4.00 Account with A

6.00 Share in Profit
2.00 Bonus

22.00 12.00

CASH SETTLEMENT 10.00

(PAYMENT)

12.00 Account with B

6.00 Share in Profit
 - 18.00 CASH SETTLEMENT
(RECEIPT)

Account with C 14.00

6.00 Share in Profit

14.00 6.00

CASH SETTLEMENT 8.00

(PAYMENT)

THEREFORE, B RECEIVES P18 (D)

 A

Account with A 2.50

2.50 -

CASH SETTLEMENT 2.50

(PAYMENT)

Account with B 4.00

CASH SETTLEMENT 4.00 -

(PAYMENT)

6.50 Account with C

- 6.50 CASH SETTLEMENT

(RECEIPT)

THEREFORE, C RECEIVES P6.5, P2.5 FROM A AND P4 FROM B (B)