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JA Problems PDF

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Iris Claire Gamad
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1K views7 pages

JA Problems PDF

Uploaded by

Iris Claire Gamad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Seay 1. Accounting by cont isemmeste Joint Operation: Share of the Assets, Liabilities, Revenves,,and nses of the Joint od proportionate Operation ves,,and Expe' of ond Z Inc. sign an agreement to collectively purchase an oil pipeline and to hire a 10) Pe vanage ‘and operate the pipeline on their behalf. The costs involved in running the neon i the revenue earned from the pipeline are shared by the three parties based on pe eship percentage. All major operating and financing decisions related to the pipeline own agreed to by the three companies. The cost of purchasing the pipeline was 00,000. ‘The pipeline has an estimated 20-year useful life with no residual value. The ret fe fr operating the pipeline for 20x4 was P12,000,000. Revenue eamed from the ie in 20x4 was P19,800,000. X invested P18,000,000 for a 30% interest. - prepare entries in the books of X, Inc. for 20x4 to capture. or recognize its share of the activities related to the oil pipeline 2, Compute the share of X Inc. in the net income of the joint operation for 20x4. 1 - Accounting by an Unincorporated Joint Operation: Reporting Proportionate Share of the Assets, Uabllities, Revenues, and Expenses of the Joint Operation king the same information In Problem I, but Instead of contributing cash for a 30% interest in the pipeline, X contributed metal pipes to-be used by the company constructing the pipeline. X had manufactured the pipes at a cost of P13,200,000. All parties to the contract agreed that the fair vdve of these pipes was P18,000,000 and the fair value of the pipeline once it was completed wos P40,000,000. All other facts are the same as in Problem |. The other operators have a 70% interest in the joint operation. Required: . 1. Prepare entries in the books of X, Inc. for 20x4 to capture or recognize its share of the activities related to the oil pipeline. : 2 Determine the realized gain and unrealized gain upon the contribution’ of the metal Pipes. 3. Determine the amortization expense for the year 20x4. 4, Determine the pipeline's net cost at the end of 20x4 Il - Accounting by an Unincorporated Joint Operation On January 1, 20x4, KK Company and DD Company signed an agreement to form a joint ween to manufacture a product called plasma. This product is used in the manufacturing of ion, : Tocommence the operation, both operators contributed P180,000 in cash. Required: 1. Prepare joumal entries to record the following: 9. Contributions of cash by the operators a b. Use of cash and loan to buy machinery & equipment costing P96,000 (cash paid, 60,000 and the balance on a loan account) and raw materials purchase on account costing P78,000. . ©. Labor incurrence amounting to P86,400 with P94,000 paid In cash. d. Loans from the bank, P72,000. ©. Repayment ot loan - machinery and equipment, P12.000, raw materials amounting to P50,400 ond other factory expenses, of P156,000. f. Depreciation of machinery and equipment, P9.600.g. Transfer of materials, labor:and overhead t 10 Work-in-py . Materials, P57,400; Factory overhéad - TOce: het, light ang po Pay, depreciation of P9,600. 1 Power, Piggy hh. Transfer of Work-in-Process to Finished Goods Inventory, P216,009 oe, i. Transfer of Finished Goods Inventory, P192,000 to aed r Joint Operators through 2. Using the same information in No. 1, determine the ending balance in: Prout He ny a. Cash b. Work-in-process account 3. Using the same information in No. 1 and 2 above, determine on December 3, Q. Total assets Du b. KK's investment c. DD's investment The following information from the accounts arisin: incurred during the period an 9 from cash receipt and disbursemert: d balance sheet of the joint Operation as at December 31. 2x5 A Corporation and BB Corporation Balance Sheet — December 31, 20x5 Ase 4 | Curent Assets | Cash . | Finished good: inventory mt P1,890,000 \ 900,000 | Wortin-Process inventory . | Matenass inventory” 2,925,000 Total current assets | Non-current Assets. | Reavy machineries {Total Assets Liabilities ond Net Assety F Curent Lataities | Acctved payroll | Accounts payable | Non-current Liabilities , —240.000 | Loan payabie - machineies Total Uabiities 7 Net Assets PS71300 | Total Liabities and Net Asset, | "200.009 | Joint Operator's Equity e238 Shell Company Wal Conlibuhon Jeiuy 1 393 - \ Leis inventory tarsfered P 6.750.000 ww Petron Company nba Contbuton. January 1 2555 =~2.130,000 Pp 3,600. Less Inventory Nansterred | 6 750.000 | Total Joint Operator's Equty/Net Asians |‘and Disbursements Disbursements P._ 6,750,000 2,250,000 1,710,000 £16,110,000 | P 2,295,000 1,800,000 5,400,000 10,125,000 —Z.200,000 - P.2.925.000 | es: Cost of inventory. [Workin process... |, Prepare entries in the books of joint operator AA to reflect the above transaction. 2. Compute the amount of Cash in Joint Operations for joint operator AA. V- Accounting by an Unincorporated Joint Operation - Joint Operator's Point of View Yecause the scale of the project exceeded the capacity of entities X and Y individually, they fendered jointly for a public contract with a government to construct a motorway between two Following the tender process the government awarded the contract jointly to entities x Y. /Naccordance with the contractual arrangements entities X and Y are jointly contracted with he govemment for delivery of the motorway in retum for EY ane {a fixed price contract). In in accordance with the agreement between entities X and Y: . eae ©. entities X and Y each Sed their own equipment and employees in the construction octivi . b. ‘nity constructed three bridges needed to cross tivers on the route at a cost of 4,800,000. fer c.enti ther elements of the.motorway at a cost of "200,000. ene Se eS ec) in the P16,800,000 jointly invoiced to'(and received from) the government. tequied: 1. Prepare entries in the books 2. Compute the net income Oo! int operator Entity X fo reflect the above transaction. ay ‘A.and B in the joint operations. joint 1 « Joint Operator's Point of View V\- Accounting by an Unincorporated + {the Joint operators) jointly buy a jet aircratt for “3 the registered as equal joint owners of the aircraft. They 10 Fy the aircraft is at the disposal of each operator for 70 days Snter into an agreement where Te tor the remaining days each year. The operators may Sach year, The aircraft fs inf efor example, lease it to a third portly. Decisions regarding (decide to use the G¥CION. re aircraft require the unanimous consent of the operators. The Maintenance and dispose for the expected life (20 years) of the-aircratt and can be changed Contractual arangemer oe, the residual valve of the aircraft is z6r0- ; a eas a jpold P120,000 to meet the joint costs of maintaining the aircrat (e.g. labia me specter een ere 0. o— i lircraft when they made. use incumed costs of running the aircraf Of the ‘kerf fe. 3 onty linsuned cask of 60,000 on pilot fees, aviation fuel and landing Costs), In 20x4 entity J also earned rental income of P456,000 by renting the aircraft to others, . 1 repare entries in the books of joint operator Entity J to reflect the above transaction, 2. Compute the net income of entity J in the joint operations Vil- Accounting by an Unincorporated Joint Operation - Partnership in Nature AA. BB, and CC agree to sell construction tools for a period of one month. AA Construct a stand on the front the lawn of CC. CC will be paid P3,000 for Cleaning ater the one-month selling period, AA, BB, and CC decide that net income, if any wil bg allocated first by the P3,000 payment to CC and then by a 40% commission on individual Sales, The balance will be distributed 75% to AA and 25% to BB. They agree that a cash box will Complicate the matters and that all Purchases and sal ity of the individual. Sales to AA, BB, an ending inventory may be purchased at 50% of cost. All other sales are to be m markup on cost. Ggrees to 9 UP the lawn lade at 100% The activity of the joint operation is as follows: Q. AA construct the stand on the front lawn at a cost of P12,000. b. AA pays for P120,000 for various Construction tools. CC Pays P6,000 for permit to Operate the concession or business. 3 and eran ase5 Gcttional Construction toots for P180,000, usin 60,000 contributed by 88 nd P120.000 of personal money 9 FS8.000 conte ty | Sales for the period were as follows: AA, ©. CC pays P10,800 for office so 1. Determine the Joint operations net income or lo: 2. Determine the iS Cash settlement between joi ; a settlement - indicate the manner ot Payment} PO (indicate the amount of cash unt Venturer (Investor) Does Not Prepare Con, Two real estate companies sel up ose Parate vehicle f Financial Statemen ere operating condominium units. One of the Companies, s§ cm Purpose of acquting ond interest in AA Corporation's (a separate vehico) outstandi 'Y Paid P2,016,000 for Such acquisition gave SS. Comeraton ris) Control wainenn@ stock on January 1, 204 Corporation. The book values and fair val Onother company over AA Wes Of AA's asse ch with amortization data, are as follows: sand liabilities on January 1, along Accounts receivable — net Inventories (sold in 20x4) Other current assets Lond ....e ee eee : Buildings - net ( 10 year remaining life) . .. Equipment - net (7 year remaining life) . Total AssetsP 960,000 P 960,000 is payOol 240,000 240,000 jecous Prtiafies === , ade bey ton 10 par . 600, Uremmon stock, P ga corn ; 1.080.000 te ibis ond Stockholders Equity... : 7.080.000 coporation reported net income of P1,440,000 for 20x4 and paid dividends of P720,000. wi mie te the schedule of determination and allocation of excess ; . 7 Prepare entries in the books of the joint venturer in 20xd in relation to its investment in joint venture, assuming that the joint venture does not prepare consolidated financial statements. p 4 Intelation to No. 2, determine the balance of Investment in SS Company and investment income (equity in net earnings) for 20x4. . IX - Joint Venturer (Investor) Prepares Consolidated Financial Statements ‘suring the same information in Problem Vill but the joint venture prepare consolidated francial statements. lequred: . |. Prepare the schedule of determination and allocation of excess 2. Prepare entries in the books of the joint venturer in 20x4 in relation to its investment in joint _ Venture, assuming that the joint venture does prepare consdlidated financial statements. th Telation to No. 2, determine the balance of Investment in SS Company, investment ioe (equity in net earnings) and dividend income for 20x4 in the books of the Joint rer. 4.in relation to No. 2, determine the balance of Investment in SS Company, investment "come (equity in net earnings) and dividend income for 20x4 in the consolidated nancial statements of the Joint Venturer Wo teal X- Joint Venture . pera estate companies set up a separate vehicle for thé purpose of acquiring and ierest '9 Condominium units. One of the companies, TT Company paid P2,016,000 for a 30% Sich gy in DDB Corporation's (a separate vehicle) outstanding voting stock on January 1, 20x4. Conporenstion gave TT Corporation to joint control with another company over DD a 'on. The book values and fair values of DD's assets and liabilities on January 1, along Mortization data, are as follows: . DD Co. DD Co, a7 ir v

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