Meds contributed on 1 July 2016 :

plant fair value $1300000 and carrying amount $900000 and cash of $800000

Healing contributed on 1 July 2016:

patent carrying amount $700000 and fair value of $1000000 and

cash $400000

On 1 Dec 2016 additional cash contribution of $1200000 cash was made in the same proportion as their initial contributions.

Production costs incurred by the joint operation for the year ended 30 June 2017 are

Wages 600000

Raw materials 250000

Manufacturing overheads 150000

Management fees 200000

Amortisation of patent 200000

Depreciation of plant 150000

Total costs of production 1550000

Less costs of finished goods inventory (1400000)

Work in progress as at 30 June 2017 150000

The only other expense admin expenses of $80000. This expenditure has not been included in the costs of production.

The assets and liabilities as at 30 June 2017:

Dr

Cash 1050000

Raw m 100000

Work in progress 150000

Finished goods 200000

Patent 1000000

Accum amortisation (200000)

Plant and equipment 1700000

Accum depreciation (150000)

Cr

Bank loan 300000

Accounts payable 90000

Accrued expenses 40000

Meds and Healing have agreed that the output of the joint operation eill be distributed in proportion to their initial contributions. The joint operation depreciates plant and equipment, and patent 10% and 20% straight line respectively.

Meds is charging annual management fee of $200000 to the joint operation. This is based on their standard mark up of 20%.

Meds sold all of the output distributed by the joint operation by 30 June 2017. Healing has sold 70% of the output received from the joint operation and the balance remains on hand as at 30 June 2017.

(i) Calculate the percentage of initial contributions for both Meds and Healing.

(ii) Preparation all journals for the year ended 30 June 2017 for Healing ONLY to record their interest in the joint operation.