Cash contributed to a joint operation was used to purchase Equipment ($250 000) and raw materials ($100 000). The entry by the joint operation to record of these transactions is which of the following?
A) DR Equipment $250 000 DR Raw materials $ 100 000
CR Cash $350 000
B) DR Work in progress $350 000 CR Joint operation capital $350 000
C) DR Cash $350 000 CR Contribution to joint operation $350 000
D) DR Cash $350 000 CR Equipment $250 000
CR Raw materials $100 000

Question

Quizplus · Accepted Answer

The correct entry to record the purchase of equipment and raw materials using cash in a joint operation is to debit the specific asset accounts (Equipment and Raw Materials) for their respective amounts and credit Cash for the total amount spent, which is $350,000. This reflects the decrease in cash and the increase in assets owned by the joint operation.

Cash Contributed to a Joint Operation Was Used to Purchase