On 1 July 2023, the North & South Joint Operation was established. The two joint operators participating in this arrangement, North Ltd and South Ltd, share control equally. Both joint operators contributed cash to establish the joint operation. The joint operation holds equipment with a carrying amount of $600 000. Both joint operators depreciate equipment using the straight-line method and the depreciation is regarded as a cost of production. The equipment has a useful life of 5 years. At 30 June 2024 North Ltd had sold all of the inventories distributed to it and South Ltd had sold 50% of the inventories distributed to it. At 30 June 2024 South Ltd must recognise the following entry, in relation to depreciation, in its records:
A) DR Inventories $30 000.
B) DR Depreciation expense $120 000.
C) DR Cost of goods sold $120 000.
D) DR Accumulated depreciation $60 000.

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The Answer of On 1 July 2023, the North & South Joint Operation was established. The two joint operators participating in this arrangement, North Ltd and South Ltd, share control equally. Both joint operators contributed cash to establish the joint operation. The joint operation holds equipment with a carrying amount of $600 000. Both joint operators depreciate equipment using the straight-line method and the depreciation is regarded as a cost of production. The equipment has a useful life of 5 years. At 30 June 2024 North Ltd had sold all of the inventories distributed to it and South Ltd had sold 50% of the inventories distributed to it. At 30 June 2024 South Ltd must recognise the following entry, in relation to depreciation, in its records:
A) DR Inventories $30 000.
B) DR Depreciation expense $120 000.
C) DR Cost of goods sold $120 000.
D) DR Accumulated depreciation $60 000.