Share of output    LO3, 4 Alice Ltd is a mining company operating in Victoria. Its main areas of mining are open‐pit gold mines and iron ore mines. In 2019 while exploring for ore the company discovered a major source of spring water suitable for bottling for human consumption. Alice Ltd believed the find was commercially significant. Given its lack of past expertise in the bottled water industry Alice Ltd decided to establish a joint operation with Springs Ltd to operate a factory to produce bottled water. The joint operation agreement was signed on 1 January 2020, with Alice Ltd and Springs Ltd having a 50% share in the unincorporated joint operation. The initial contributions by the two operators were as follows. Alice Ltd: Capitalised expenses $ 800 000 Equipment 800 000 Cash 2 400 000 Springs Ltd: Cash 4 000 000 The capitalised expenses were recorded in the books of Alice Ltd at $320 000, while the equipment was recorded at a carrying amount of $640 000. In order to supply the cash, Alice Ltd borrowed $800 000 of its required contribution. It is expected that the reserves of water will be depleted within 10 years, and the equipment is expected to have a similar useful life. On 1 June 2020, the joint operation was ready to start producing bottles of water. The joint operation’s accounts at 30 June 2021 contained the following information. Statement of financial position (extract) 2021 2020 Work in progress $ 200 000 Capitalised costs $ 800 000 800 000 Plant and equipment 8 160 000 7 760 000 Cash 80 000 240 000 Accounts payable — plant (240 000) (800 000) Accrued expenses — wages etc. (160 000) (200 000) Cash receipts and payments (extract) 2021 Payments Receipts Materials and supplies $480 000 Administration 160 000 Wages 560 000 Accounts payable — plant 960 000 Contributions from joint operators $2 000 000 The output of the first year’s operations was distributed equally to the joint operators. Production in the first year was estimated to be 15% of the reserves. At 30 June 2021, Alice Ltd held 10% of its share of output in inventories, having sold the rest to its customers for $2 000 000. Expenses of the joint operation incurred up to 30 June 2021 were allocated to the operators. Because of some damage to the environment caused by the establishment of the pumping station to extract the water, there is a potential restoration cost to be incurred at closure of the joint operation. Whether this will be required will depend on the result of current legal inquiries. Required Prepare the journal entries in the records of Alice Ltd for the periods ending 30 June 2020 and 2021.