Cash contributed to a joint operation was used to purchase machinery ($500 000) and raw materials ($120 000). The following entry would be part of the overall recording of these transactions:
A) DR Machinery $500 000 DR Raw materials $ 120 000
CR Cash $620 000
B) DR Work in progress $620 000 CR Joint operation capital $620 000
C) DR Cash $620 000 CR Contribution to joint operation $620 000
D) DR Cash $620 000 CR Machinery $500 000
CR Raw materials $ 120 000

Question

Quizplus · Accepted Answer

Option A correctly records the purchase of machinery and raw materials by debiting these asset accounts and crediting cash, reflecting the outflow of cash to acquire these assets.

Cash Contributed to a Joint Operation Was Used to Purchase