Question
Apple Ltd, Orange Ltd and Pear Ltd (3 companies) formed a joint operation on 1 July 2020. Each company has a one-third interest in the
Apple Ltd, Orange Ltd and Pear Ltd (3 companies) formed a joint operation on 1 July 2020. Each company has a one-third interest in the joint operation. Apple Ltd agreed to contribute plant and equipment with a fair value of $3m to the joint operation, whilst the other operators contributed $3m in cash. The carrying amount of the plant was:
Plant & Equipment 2,500,000
Accumulated depreciation 700,000
Carrying Amount 1,800,000
Required:
- Prepare the required entries for each operator (6 marks)
- Discuss different types of joint arrangements with reference to relevant AASB. Outline advantages and disadvantages of each type of joint arrangements. (4marks)
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Horngrens Financial And Managerial Accounting The Financial Chapters
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
6th Edition
978-0134486840, 134486838, 134486854, 134486846, 9780134486833, 978-0134486857
