Solution-Illustrate the accounting treatment for the land

Illustrate the accounting treatment for the land

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Reference no: EM132694686

Attar Sdn Bhd planted 20 five year old jackfruit trees in Batu Pahat, Johor in the year 1998. Jackfruit trees can normally live up to 60 years and even to 100 years. They normally start producing fruit after 14 years. Attar began to harvest fruits in 2007. Each year the trees normally produce up to 20 tons of fruits. ( 1 tonne = 1000 kg). Peak harvest periods for jackfuits are from April to August or September to December in Malaysia.

Attar's financial year end is on 30 June. On 30 June 2020, it was estimated that there is 150 kg of fruit that has been harvested. In June 2019, the average price was RM2.50 per kg for the farm price. In June 2020, the price dropped to RM2.00 due to the falling demand caused by the COVID-19 outbreak. The market value of the land with the trees were RM2m. A nearby piece of similar sized empty property was recently sold for RM1.5 m.

Required:

Problem 1: Illustrate the accounting treatment for the land, trees and fruits for the year ending June 2020.

Reference no: EM132694686

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Illustrate the accounting treatment for the land

Reference no: EM132694686

Reference no: EM132694686

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