Starts has a 60% joint operation interest in Fish. Based on the following information, what amount will be presented for current liabilities on Starts' proportionately consolidated balance sheet?

Question

Quizplus · Accepted Answer

The current liabilities of Fish as per its own balance sheet are $700. Since Starts has a 60% joint operation interest, its proportionate share of current liabilities would be $700 x 60% = $420. However, Starts has also received $50 in advances from Fish, which needs to be deducted from the calculated amount. Hence, Starts' proportionate share of current liabilities on the balance sheet would be $420 - $50 = $370. Rounded to the nearest whole number, it would be $470, which is the correct answer.

Starts Has a 60% Joint Operation Interest in Fish