A joint venture arises when two or more parties set up a separate entity to be operated under joint control. Neither venturer controls individual assets or liabilities. Rather, they are jointly in control of the entire venture. There must be a separate legal entity. The entity will prepare its own separate financial statements and will be dealt with within the books of each venturer using equity accounting as for associate companies
Equivalent Production Units represents the production of a process in terms of complete units. In other words, it means converting the incomplete production into its equivalent of complete units. The term equivalent unit means a notional quantity of completed units substituted for an actual quantity of incomplete physical units in progress when the aggregate work content of the incomplete units is deemed to be equivalent to that of the substituted quantity. The principle applies when operating costs are apportioned between work in progress and completed units.
(a) The dividend growth model can be used in determining the cost of equity capital.
This model, however, has some weaknesses.
Outline the weaknesses of the model.
(b) The following information is available regarding a mutual fund:
The double-entry system of bookkeeping refers to a system of accounting under which both of the aspects (i.e. debit and credit) of every transaction are recorded in the accounts involved. For each transaction, this means that a bookkeeping entry will have to be made to show an increase or decrease of the other item