I.A, B, and C formed a joint operation for the sale of assorted clothing during the summer break. Their transactions during the two-month period are as follows:

Joint Operation

March 5Merchandise - A7,000

12Merchandise - B8,500

14Freight-in - C400

15Cash Sales - C20,000

18Cash Sales - C5,000

30Merchandise - B1,000

April 10Purchases - C2,500

22 Selling Expenses - C800

30Unsold Merchandise Charged to A600

The Joint arrangement provided for the division of gains and losses among A, B, and C in the ratio 2:3:5. The joint operation is close on April 30.

Requirements:

1.What is the joint operation profit/ (loss)?

2.What is the amount of cash that A will receive on final settlement?

II.J and P formed a joint operation. The following were the transactions during the year:

JP

Total Purchases400320

Total sales480240

Expenses paid800

Other income40

The joint operation was completed at the end of the year. Each joint operator was entitled to a 10% commission on its purchases and a 20% commission on its sales. Any remaining profit or loss is divided equally.

Requirements:

a.How much is the profit (loss) if the joint operation?

b.On the cash settlement between the joint operators, who will be paid and by what amount?

III.Ven, Co. owns 20% interest in Nus Joint Venture, Inc. and uses the equity method to account for its interest in the joint venture. Ven, Co. has a joint control over Nus Joint venture, Inc. On January 1, 2018, Ven sold equipment with carrying amount of 400,000 and a remaining useful life of 10 years to Num Joint Venture for 480,000. Gain of 80,000 was recorded by Ven. Both Ven and Nus uses the straight-line method of depreciation.

Requirements:

1.How much is the adjusted share in the profit of the joint venture in 2018 of the joint venture reports profit of 4,000,000?

2.How much is the adjusted share in the profit of the joint venture in 2019 of the joint venture reports profit of 4,800,000?

IV.A Co. owns 20% interest of the B Joint Venture, Inc. and uses the equity method to account for its interest in the Joint Venture. A Co. has joint control over the B Joint Venture, Inc. On January 1, 2017, B Joint Venture sold a land with a carrying amount of 1,000,000 to A Co for 1,080,000. Gain of 80,000 was recorded by B Joint Venture.

Requirements:

a.How much is the adjusted share in profit of the B Joint Venture if B reports a profit of 4,000,000?

b.How much is the adjusted share in the profit of the joint venture in 2018 if the B Joint Venture reports profits of 4,800,000?

a.976,000

b.960,000

c.962,000

d.1,020,000

V.The following Joint Venture account reflects the transactions of the venture of H, A and M as recorded by A:

The venture agreement provided for the division of gains and losses among H, A, and M the ratio of 5:3:2. The venture was to close as of December 31, 2019.

Requirements:

1.The total gains from the joint venture amounts to? Explain how you arrived in your answer by using the accounting concepts.

2.How much is received by M as final settlement? Explain how you arrived in your answer by using the accounting concepts.