International accounting course Department of Accounting Question one : on the 1 July 2013, two companies agreed to form am to be used in the making of high grade mining instruments. It was agreed that the unincorporated joint operation to design specialised tools, which is called Smart Tools relative joining operation would be: Company name Stafford Ltd Tutbury Ltd Interest 20% 80% The contributions of each company were as follow: Stafford Ltd provided plant to SmartTool with a carrying value of 1,800,000 and fair value of 2400,000, with an expected life of 10 years. Tutbury Ltd provided cash of 1600,000. Information from SmartTools financial statement as at 30 June, 2014 is as follows: Cash Equipment Accumulated depreciation - equipment Plant Accumulated depreciation - plant Raw material Work in process Inventory Total assets Account payable Accruals expenses Bank loan Total liabilities Net assets Cost of inventory 95,000 1200,000 (120,000 1800,000 (200,000 163,000 160,000 550,000 3648,000 100,000 248,000 740,000 1088,000 2560,000 1990,000 Required: Prepare the necessary entries at the beginning and the end of financial year at the books of the two companies. Date Stafford Ltd 1/07/2013 Tatbury 30/06/2014 30/06/2014 For accumulated depreciation