Alfie Limited and Benny Limited formed a joint operation and share in the output of the joint operation 60:40. The joint operation paid a management fee of $40 000 to Alfie Limited during the current period. The cost to Alfie Limited of supplying the management service was $28 000. Alfie Limited records the management fee revenue as follows:

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CAlfie Limited should recognize the full management fee revenue of $40,000 as it is the amount agreed upon for the management services provided to the joint operation (Option A). Additionally, since Alfie Limited has a 60% share in the joint operation, it should also recognize its share of the expense, which is 60% of $40,000, equating to $24,000. This is not directly represented in the options provided, but the understanding of recognizing full revenue and then accounting for the share of expenses separately is crucial in joint operations accounting. Option C is mentioned because it seems to attempt to reflect a portion of the transaction, but it's important to note that the correct accounting treatment involves recognizing the full revenue amount and then dealing with the share of costs or expenses separately, which isn't perfectly captured by the given options.

Alfie Limited and Benny Limited Formed a Joint Operation and Share