Three joint operators are involved in a joint operation that manufactures mining equipment. At the beginning of the year the joint operation held $100 000 in cash. During the year, the joint operation paid wages of $40 000. Additionally, creditors amounting to $80 000 were paid and the joint operators contributed $30 000 cash each to the joint operation. The balance of cash held by the joint operation at the end of the year is:
A) $10 000.
B) $50 000.
C) $70 000.
D) $150 000.

Question

Quizplus · Accepted Answer

The cash flow for the joint operation can be summarised as follows:

Beginning cash balance: $100 000

Cash received from joint operators: $30 000 x 3 = $90 000

Total cash available: $190 000

Cash paid out for wages and creditors: $40 000 + $80 000 = $120 000

Ending cash balance: $190 000 - $120 000 = $70 000

Therefore, the balance of cash held by the joint operation at the end of the year is $70 000.

Three Joint Operators Are Involved in a Joint Operation That