Question one : on the 1 July 2013, two companies agreed to form an unincorporated joint operation to design specialised tools, which is called SmartTools to be used in the making of high grade mining instruments. It was agreed that the relative joining operation would be: Company name Interest Stafford Ltd 35% Tutbury Ltd 65% 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 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 Net assets Cost of inventory Required: Prepare the necessary entries at the beginning and the end of financial year at the books of the two companies. Date 1/07/2013 Stafford Ltd Tutbury 30/06/2014 30/06/2014 For accumulated depreciation