Three joint operators are involved in a joint operation that manufactures ships chandlery. At the beginning of the year the joint operation held €50 000 in cash. During the year the joint operation incurred the following expenses: Wages paid €20 000, Overheads accrued €10 000. Additionally creditors amounting to €40 000 were paid and the joint operators contributed €15 000 cash each to the joint operation. The balance of cash held by the joint operation at the end of the year is:
A) € 5000;
B) €25 000;
C) €35 000;
D) €75 000.

Question

Quizplus · Accepted Answer

The initial cash was €50,000. Expenses were €20,000 (wages) + €10,000 (overheads) = €30,000. Creditors paid were €40,000. Contributions were €15,000 each from 3 operators = €45,000. Ending cash = €50,000 - €30,000 - €40,000 + €45,000 = €35,000.

Three Joint Operators Are Involved in a Joint Operation That