Study Check 1

No. A is the sole operator, which means the 'joint operator' is managed entirely by him.

Study Check 2

This arrangement is a joint operation.

Study Check 3

This is a joint venture.

This is a joint venture.
tirely by him.
 D
E
F

Gas pipeline

Operating expenses - gas

Cash

Net income of D from jo

 30%
35%
35% >> workback, E and F are assumed to be 70% aggregate

Gas pipeline 15,000,000.00

Cash 15,000,000.00
(50M x 30%)

Operating expenses - gas pipeline 3,750,000.00

Cash 3,000,000.00
Accum depreciation 750,000.00

Share in management fee (10M x 30%) 3,000,000.00

Share in depreciation of pipeline 750,000.00
Total 3,750,000.00

4,950,000.00
Revenue - gas pipeline 4,950,000.00
(16.5M x 30%)

Net income of D from joint operation:

Revenues 4,950,000.00
Expenses - 3,750,000.00
Net income 1,200,000.00
PROBLEM 18-1

Books of Lebron Books of Durant

Construction costs 11,000,000.00 Construction costs

Receivable from Durant 1,000,000.00
Cash 12,000,000.00

Cash 15,000,000.00 Cash

Construction revenue 15,000,000.00

Construction revenue 15,000,000.00 Construction revenue

Income summary 4,000,000.00
Construction costs 11,000,000.00

Given the volume of transactions, kayang-kaya idiretso sa libro,

so no longer use "JO" or "Interest in JO" accounts.
Books of Durant

Construction costs 11,000,000.00

Payable to Lebron 1,000,000.00
Cash 10,000,000.00

15,000,000.00
Construction revenue 15,000,000.00

Construction revenue 15,000,000.00

Income summary 4,000,000.00
Construction costs 11,000,000.00
 PROBLEM 18-2

Books of Bryant Books of Wade

50% Cash 20,000.00 Cash

100% PPE, net 240,000.00 Other assets
50% Other assets 100,000.00
100% Current liabilities 240,000.00
50% Long-term debt 50,000.00
50% Interest in JO 70,000.00

Interest in JO = Capital Investment

JO-Cash is only used if there are no separate books.

Books of Wade

20,000.00
Other assets 100,000.00
Long-term debt 50,000.00
Interest in JO 70,000.00
Assume joint venturers do not prepare consolidated FS.

PROBLEM 18-3

Books of Lin

2017 Investment in joint venture 10,000,000.00

Cash

Investment in joint venture 1,000,000.00

Income from joint venture
(4M-2M) x 50%

2018 Investment in joint venture 1,500,000.00

Income from joint venture
(5M-2M) x 50%

Cash 500,000.00
Investment in joint venture
(1M x 50%)
 Books of Kid

2017 Investment in joint venture 10,000,000.00

10,000,000.00 Cash

Investment in joint venture 1,000,000.00

1,000,000.00 Income from joint venture
(4M-2M) x 50%

2018 Investment in joint venture 1,500,000.00

1,500,000.00 Income from joint venture
(5M-2M) x 50%

Cash 500,000.00
500,000.00 Investment in joint venture
(1M x 50%)
10,000,000.00

1,000,000.00

1,500,000.00

500,000.00
NO SEPARATE BOOKS

Joint operation

Receivable from Willie

Joint operation

Joint operation

Joint operation

Inventory
Receivable from Grinc

Joint operation

Receivable from Willie

Payable to Willie
Payable to Grinch
Cash
NO SEPARATE BOOKS

Books of Scrooge Books of Grinch

Joint operation 158,080.00 Joint operation

Inventory 66,880.00 Inventory
Payable to Grinch 91,200.00 Payable to Scrooge

Receivable from Willie 243,200.00 Receivable from Willie

Joint operation 243,200.00 Joint operation

Joint operation 10,640.00 Joint operation

Payable to Willie 10,640.00 Payable to Willie

Joint operation 55,800.00 Joint operation

Payable to Willie 55,800.00 Payable to Willie

Joint operation 15,000.00 Joint operation

Cash 15,000.00 Payable to Scrooge

Inventory 15,200.00 Inventory

Receivable from Grinch 11,400.00 Receivable from Scrooge
Joint operation 26,600.00 Joint operation

Joint operation 30,280.00 Joint operation

JO - Share in NI 3,667.11 JO - Share in NI
Payable to Grinch 3,768.44 Payable to Scrooge
Payable to Willie 22,844.44 Payable to Willie

Receivable from Willie 153,915.56 Receivable from Willie

Payable to Grinch 83,568.44 Payable to Scrooge
Cash 70,347.11 Cash

Payable to Willie 89,284.44 Payable to Willie

Payable to Grinch 94,968.44 Payable to Scrooge
Cash 70,347.11 Cash
Receivable from Willie 243,200.00 Receivable from Willie
Receivable from Grinch 11,400.00 Receivable from Scrooge
ooks of Grinch Books of Willie

158,080.00 Joint operation 158,080.00

91,200.00 Payable to Scrooge 66,880.00
66,880.00 Payable to Grinch 91,200.00 Gross sales
Sales discounts
243,200.00 JO - A/R 243,200.00 Net sales
243,200.00 Joint operation 243,200.00 Cost of goods sold

10,640.00 JO - Cash 232,560.00

10,640.00 Joint operation 10,640.00 Gross profit
JO - A/R 243,200.00 Expenses
Bad debts
55,800.00 Joint operation 55,800.00 Rental expense
55,800.00 JO - Cash 55,800.00 Net income

15,000.00 Joint operation 15,000.00

15,000.00 Payable to Scrooge 15,000.00

11,400.00 Receivable from Scrooge 15,200.00 Commission

15,200.00 Receivable from Grinch 11,400.00 Allocation
26,600.00 Joint operation 26,600.00 Balance, equally
Total
30,280.00 Joint operation 30,280.00
3,768.44 JO - Share in NI 22,844.44
3,667.11 Payable to Scrooge 3,667.11
22,844.44 Payable to Grinch 3,768.44 Balances of net receiv
Scrooge
153,915.56 Cash
70,347.11 JO - Cash 176,760.00 Grinch
83,568.44 Payable to Scrooge 70,347.11
Payable to Grinch 83,568.44 Willie

89,284.44 Payable to Scrooge 85,547.11

85,547.11 Payable to Grinch 94,968.44
83,568.44 Cash 22,844.44
243,200.00 JO - Cash 176,760.00
15,200.00 Receivable from Scrooge 15,200.00
Receivable from Grinch 11,400.00
Gross sales 243,200.00
Sales discounts - 4,104.00
Net sales 239,096.00
Cost of goods sold
Beginning inventory 158,080.00
Ending inventory - 26,600.00 131,480.00
Gross profit 107,616.00
Expenses 55,800.00
Bad debts 6,536.00
Rental expense 15,000.00 77,336.00
Net income 30,280.00

Scrooge Grinch Willie

Commission 19,456.00 Initial investment:
Allocation 278.67 380.00 Scrooge 66,880.00
Balance, equally 3,388.44 3,388.44 3,388.44 Grinch 91,200.00
3,667.11 3,768.44 22,844.44
Current balance: 10,165.33
Allocated (divide by 3) 3,388.44

Balances of net receivables:

Scrooge 153,915.56 Receivable from Willie
83,568.44 Payable to Grinch
Grinch 153,915.56 Receivable from Willie
70,347.11 Payable to Scrooge
70,347.11 Payable to Scrooge
83,568.44 Payable to Grinch
Allowed/year 1/12
3,344.00 278.67
4,560.00 380.00
SEPARATE BOOKS

Interest in JO

Interest in JO

Inventory

Interest in JO

Cash
SEPARATE BOOKS

Books of Scrooge Books of Grinch

Interest in JO 66,880.00 Interest in JO

Inventory 66,880.00 Inventory

NO ENTRY NO ENTRY

NO ENTRY NO ENTRY

NO ENTRY NO ENTRY

Interest in JO 15,000.00 NO ENTRY

Cash 15,000.00

Inventory 15,200.00 Inventory

Interest in JO 15,200.00 Interest in JO

Interest in JO 3,667.11 Interest in JO

JO - Share in NI 3,667.11 JO - Share in NI

Cash 70,347.11 Cash

Interest in JO 70,347.11 Interest in JO
ooks of Grinch Books of Willie

91,200.00 NO ENTRY Inventory

91,200.00

NO ENTRY NO ENTRY A/R

NO ENTRY NO ENTRY Cash

Sales discounts
Bad debt expense

NO ENTRY NO ENTRY Operating expenses

NO ENTRY NO ENTRY Rent expense

11,400.00 NO ENTRY Sales

11,400.00

Scrooge, capital
Grinch, capital

Income summary
3,768.44 Interest in JO 22,844.44
3,768.44 JO - Share in NI 22,844.44

Scrooge, capital
83,568.44 Cash 22,844.44 Grinch, capital
83,568.44 Interest in JO 22,844.44 Willie, capital
 Books of JO

Inventory 158,080.00
Scrooge, capital 66,880.00
Grinch, capital 91,200.00 Gross sales
Sales discounts
243,200.00 Net sales
Sales 243,200.00 Cost of goods sold
Beginning inventory 158,080.00
Cash 232,560.00 Ending inventory - 26,600.00
Sales discounts 4,104.00 Gross profit
Bad debt expense 6,536.00 Expenses 55,800.00
A/R 243,200.00 Bad debts 6,536.00
Rental expense 15,000.00
Operating expenses 55,800.00 Net income
Cash 55,800.00

Rent expense 15,000.00

Scrooge, capital 15,000.00 Scrooge
Commission
Sales 243,200.00 Allocation 278.67
Income summary 30,280.00 Balance, equally 3,388.44
Sales discounts 4,104.00 Total 3,667.11
Bad debt expense 6,536.00
Operating expenses 55,800.00
Rent expense 15,000.00
COGS 131,480.00 Cash settlement:
Scrooge 70,347.11
Scrooge, capital 15,200.00 Grinch 83,568.44
Grinch, capital 11,400.00 Willie 22,844.44
Inventory 26,600.00

Income summary 30,280.00

Scrooge, capital 3,667.11
Grinch, capital 3,768.44
Willie, capital 22,844.44

Scrooge, capital 70,347.11

Grinch, capital 83,568.44
Willie, capital 22,844.44
Cash 176,760.00
 243,200.00
- 4,104.00
239,096.00

131,480.00
107,616.00

77,336.00
30,280.00

Grinch Willie
19,456.00 Initial investment: Allowed/year 1/12
380.00 Scrooge 66,880.00 3,344.00 278.67
3,388.44 3,388.44 Grinch 91,200.00 4,560.00 380.00
3,768.44 22,844.44
Current balance: 10,165.33
Allocated (divide by 3) 3,388.44
 Books of A Books of B

Interest in JO
Inventory

Inventory
Interest in JO

Interest in JO 4,545.00 Interest in JO

JO - Share in NI 4,545.00 JO - Share in NI

Cash 4,545.00 Cash

Interest in JO 4,545.00 Interest in JO
 Books of A Books of B

Interest in JO 13,000.00 Interest in JO

Cash 5,000.00 Inventory
Inventory 8,000.00

Interest in JO
Inventory
Interest in JO 300.00
 Books of B Books of C Books o
Interest in JO 12,750.00 Inventory
Inventory 12,750.00

10,500.00 Inventory
Inventory 10,500.00

Freight-in

Inventory

Selling expenses

Cash

Cash

1,815.00 B, capital
Interest in JO 1,815.00

2,727.00 Interest in JO 1,818.00 Sales

JO - Share in NI 2,727.00 JO - Share in NI 1,818.00

Income summary

11,412.00 Cash 14,568.00

Interest in JO 11,412.00 Interest in JO 14,568.00
 Books of B Books of JO

6,000.00 Cash 5,000.00

Inventory 6,000.00 Inventory 14,000.00
Anson, capital 13,000.00
Baylon, capital 6,000.00

4,000.00 Inventory 4,000.00

Inventory 4,000.00 Baylon, capital 4,000.00

Permit
 Books of JO
Inventory 12,750.00
C, capital 12,750.00

Inventory 10,500.00
B, capital 10,500.00

Freight-in 525.00
Cash 525.00

Inventory 525.00
Cash 525.00

Selling expenses 600.00

Cash 600.00

30,600.00
Sales 30,600.00

6,300.00
Sales 6,300.00

B, capital 1,815.00
Inventory 1,815.00

Sales 36,900.00
Income summary 9,690.00
COGS 26,610.00
Selling expenses 600.00

Income summary 9,690.00

A, capital 4,545.00
B, capital 2,727.00
C, capital 1,818.00