Reference no: EM132640571

Question - X, Y, and Z agreed to form a joint operation. Profit or loss of the joint operation shall be divided equally. Y is appointed as the manager. The following were the transactions during the year:

Inventory costing P 1,000 was sent by X to Y.

Freight paid by on the inventories sent to Y amounted to P 50.

Cash of P 2,000 was sent by Z to Y to be used to purchase additional inventory.

Y purchased additional inventory amounting to P 2,500, P 500 of which were made on account of Y.

Cash sales made by Y amounted to P 8,000.

Operating expenses amounting to P 550 were paid by Y using own cash.

Unsold inventory at year-end amounted to P 300.

REQUIRED -

1. If there is no separate books maintained for Joint Operations, how much is the profit or loss of the Joint Operations?

2. How much is the share of profit of X, Y, and Z respectively?

3. Assume that the Joint Operation is liquidated and Z is charged the unsold inventory at cost, how much is the Joint Operation Cash to be shown in the books of Y?

4. How much is the cash receipt or (cash payment) of X, Y, and Z, respectively?

5. If there is a separate book maintained for Joint Operations, how much is the profit or loss of the Joint Operations?