Question 5 (20 marks) Joint operations On 1 July 2041, Bunbury Ltd entered into an agreement with Broome Ltd to form an unincorporated joint operation. It was agreed that each party to the agreement would share production equally Bunbury Ltd's initial contribution consisted of cash of $4,800,000 Broome Ltd contributed machinery with a fair value of $4,800,000 to the operation The machinery contributed by Broome Ltd had a carrying amount of $4,610,000 On 30 November 2040, each party contributed a further $6,200,000 in cash Machinery depreciation is recorded in the books of the joint operation at 30% per annum. Each operator accounts for the joint operation in accordance with AASB 11 by using the line-by-line method of accounting. On 30 June 2041, the joint operation manager provided the following statements: Costs incurred for the year ended 30 June 2041 $ Wages Depreciation Supplies Overheads 4,320,000 1,728,000 5,760,000 4.800,000 16,608,000 -13.200000 3,408,000 Cost of inventory Work in progress at 30 June 2041 Cash Receipts and Payments for the year ended 30 June 2041 Receipts: $ Original contributions Additional contributions $ 4,800,000 12.400,000 17,200,000 Cash Receipts and Payments for the year ended 30 June 2041 Receipts: $ Original contributions Additional contributions $ 4,800,000 12.400.000 17,200,000 Payments: Machinery (02/01/41) Wages Supplies Overheads Operating expenses 1,920,000 3,840,000 5,280,000 4,560,000 480.000 16.080.000 1,120,000 Closing Cash Balance $ Statement of Financial Position As at 30 June 2041 Assets $ Cash Supplies Work in Progress Machinery 6,720,000 Less Accum. Depn - Machinery -1.728.000 Total Assets 1,120,000 480,000 3,408,000 4.992.000 10,000,000 Question 5 (20 marks) Joint operations On 1 July 2041, Bunbury Ltd entered into an agreement with Broome Ltd to form an unincorporated joint operation. It was agreed that each party to the agreement would share production equally Bunbury Ltd's initial contribution consisted of cash of $4,800,000 Broome Ltd contributed machinery with a fair value of $4,800,000 to the operation The machinery contributed by Broome Ltd had a carrying amount of $4,610,000 On 30 November 2040, each party contributed a further $6,200,000 in cash Machinery depreciation is recorded in the books of the joint operation at 30% per annum. Each operator accounts for the joint operation in accordance with AASB 11 by using the line-by-line method of accounting. On 30 June 2041, the joint operation manager provided the following statements: Costs incurred for the year ended 30 June 2041 $ Wages Depreciation Supplies Overheads 4,320,000 1,728,000 5,760,000 4.800,000 16,608,000 -13.200000 3,408,000 Cost of inventory Work in progress at 30 June 2041 Cash Receipts and Payments for the year ended 30 June 2041 Receipts: $ Original contributions Additional contributions $ 4,800,000 12.400,000 17,200,000 Cash Receipts and Payments for the year ended 30 June 2041 Receipts: $ Original contributions Additional contributions $ 4,800,000 12.400.000 17,200,000 Payments: Machinery (02/01/41) Wages Supplies Overheads Operating expenses 1,920,000 3,840,000 5,280,000 4,560,000 480.000 16.080.000 1,120,000 Closing Cash Balance $ Statement of Financial Position As at 30 June 2041 Assets $ Cash Supplies Work in Progress Machinery 6,720,000 Less Accum. Depn - Machinery -1.728.000 Total Assets 1,120,000 480,000 3,408,000 4.992.000 10,000,000
