(15 marks) QUESTION 3-Joint Operations Waste Ltd and Want Ltd entered into a joint operation known as Dirt to collect and recycle scrap paper from government departments on 1 January 2017. The joint operation agreement states that Waste Ltd and Want Ltd will share output, contributions and costs equally and that Waste Ltd and Want Ltd hold the joint operation assets as tenants in common, with Waste Ltd and Want Ltd each having a 50% interest. The joint operation agreement established the initial contributions as follows: Contribution: Waste Ltd Contribution: Want Ltd Agreed Value Agreed Value Assets Cost Cost $ Cash 8,000,000 8,000,000 Land 6,200,000 5,900,000 9,700,000 10,000,000 6,200,000 Building Less accumulated 6,800,000 depreciation Equipment Less accumulated (300,000) (700,000) 6,300,000 6,000,000 8,000,000 17,000,000 depreciation Total (500,000) (10,000,000) 22,200,000 21,100,000 22,200,000 21,100,000 The depreciation rates used by each of joint operators in their respective financial statements are: Equipment 20 % ; and Buildings 10%. Both joint operators agreed to record any depreciation of the joint operation using the straight-line method, in their own separate financial statements. There are no residual values for the assets assigned to the joint operation. 1) 2) The joint operators contributed, in total, a further $20,000,000 during the 2017 year with each joint operator contributing the appropriate portion according to their original share in Dirt. 3) The joint operators chose not to revalue their remaining interests in the contributed assets in their separate records. 4) By agreement, Want Ltd will manage the joint operation project and will receive a management fee of $1,000,000 per annum. The management fee has been treated as a period expense. $300,000 of this amount remains outstanding at 31 December 2017 and has been accrued in the Joint Operation Memorandum Accounts. 5) The joint operation purchased equipment for $5,000,000 on 1 January 2017, which had a useful life of 5 years, no residual value and was depreciated on the straight-line basis. No sales of joint operation non-current assets occurred during the year ended 31 December 2017 QUESTION 3-Continued Extracts from the Joint Operation Memoranda Accounts for Dirt are provided below Statement of Total Costs of Production $ for year ended 31 December 2017 Wages and salaries 15,500,000 7,500,000 Supplies and materials 1,000,000 Management fee Administration costs 6,000,000 Less: Work-in-progress inventories (WIP) 3,000,000 27,000,000 Cost of Production Statement of Assets & Liabilities as at 31 December 2017 Land 6,200,000 Building 15,900,000 Equipment 19,300,000 Cash 9,000,000 Work-in-progress inventories (WIP) 3,000,000 Total assets 53,400,000 Management fee payable to Want Ltd (300,000) (15,700,000) (16,000,000) Other accounts payable Total liabilities Required: In accordance with the requirements of AASB 11 Joint Arrangements, prepare all the journals entries recorded by Waste Ltd to account for their interest in the Dirt Joint Operations for the period from 1 January 2017 to 31 December 2017