Ma Ltd, Ming Ltd and Moe Ltd entered into a joint operation on 1 July 2019 to explore and mine gold in Western Australia. The economic life of the joint venture is 10 years. Thejointventureagreementstatesthateachoperatorwillcontributethefollowingassets to establish the joint operation and to provide for initial running costs. The fair value of the amounts contributed is shown in the followingtable:

From Ma Ltd

Exploration and Evaluation Asset PPE

Cash

2,000,000

1,000,000

2,000,000

5,000,000

From Ming Ltd

Cash

6,000,000

6,000,000

From Moe Ltd

PPE

Cash

3,000,000

3,000,000

6,000,000

The contractual arrangement is that the operators divide extracted gold in proportion to their contributions to establish the joint operation, that is, the ratio 30:35:35 The operators meet the costs of production in the same proportions.

The joint operation is managed by Ma Ltd who is entitled to receive a yearly fee of

$150,000 annually. The cash contributed by the operators is used by the manager to purchase additional property plant and equipment at a cost of $9,000,000 from independent third parties. These assets are held as tenants in common in proportion to the operators' contribution ratio 30:35:35

The Exploration and Evaluation Asset had been recorded in the books of Ma Ltd at

$1,500,000. The property plant and equipment (PPE) contributed to the joint venture by Ma Ltdwasoriginallypurchasedfor$3,000,000withaccumulateddepreciationof$1,400,000 at 1 July 2019. This asset is considered impaired. Ma Ltd decided not to revalue its remaining interest in the non-current assets contributed to the joint operations. The PPE contributed by Moe Ltd was new and recorded at$3,000,000.

The following was extracted from the accounting records kept by the joint venture manager for the year ending 30 June 2020.

Joint venture balance sheet extract at 30 June 2020

Cash and cash equivalents

580,000

Supplies

100,000

Undistributed gold

1,100,000

Exploration and Evaluation Asset

2,000,000

Property Plant and Equipment

13,000,000

Accounts payable and Wages payable

(900,000)

Net assets

15,880,000

Joint venture cash receipts and payments for the year ended 30 June 2020

Cash contributions from operators

Less: Cash payments

11,000,000

Plant and Equipment

(9,000,000)

Wages

(800,000)

Materials and supplies

(350,000)

Utilities

(120,000)

Management fee

(150,000)

Cash balance at the end of the period

580,000

Cost of production statement for the year ended 30 June 2020

Wages paid

800,000

Wages payable

300,000

1,100,000

Materials and supplies paid

350,000

Materials and supplies payable

150,000

Less: Materials and supplies on hand

(200,000)

300,000

Utilities

120,000

Management fee

150,000

Total production cost

1,670,000

Less: Undistributed Gold

1,100,000

Cost of gold distributed

570,000

By 30 June 2020 both Ma Ltd and Ming Ltd had sold 70% of their share of output while Moe Ltd had sold 60% of its share of output. All three operators make sales to customers at a mark-up of 50% on the full cost.

Required:

Prepare the required entries for each operator for the year ended 30 June 2020.