Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Jisoo Limited and Rose Pty Limited entered into a joint operation, BP.Perfume, at the beginning of the financial year to produce and sell fragrances. The
Jisoo Limited and Rose Pty Limited entered into a joint operation, BP.Perfume, at the beginning of the financial year to produce and sell fragrances. The joint operation agreement indicates the parties will share output, contributions and costs, and hold the joint operation assets as tenants in common, with the respective interests being 40% Jisoo Limited and 60% Rose Pty Limited. Jisoo Limited contributed the Equipment which has a book value of $200,000 and a fair value at the date of contribution of $320,000 whilst Rose Pty Limited contributed cash of $480,000. Jisoo Limited chose not to revalue their remaining interests in the contributed assets in their separate records.Using the line-by-line method, consistent with AASB 11 Joint Arrangements, what would be the interests in assets of the joint operation held by Jisoo Limited immediately after the contribution of the assets to the joint operation?
a. Equipment $80,000; Cash $192,000
b. Equipment $200,000
c. Equipment $128,000; Cash $192,000
d. Equipment $192,000; Cash $288,000.
Step by Step Solution
★★★★★
3.39 Rating (149 Votes )
There are 3 Steps involved in it
Step: 1
We have interest of Jisoo in joint operation 40 Book valu...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started