Reference no: EM132531530
Point 1: In 2015, ABC Limited established and commenced operation of an Flower business in Suva. The trees were planted in 2007, and began producing saleable flowers in 2016.
Point 2: In 2017, 80% of the flowers are sold, immediately after they are picked, for a sale price of $150000. Selling costs are assumed to be immaterial. The remaining 20% of the picked flowers are recognized as inventories at the end of the reporting period.
Point 3: The fair value less the estimated point of sale costs of the flower trees at 30th June 2016 ( the end of the previous reporting period) was $95000 and at 30th June 2017, $115000. During the reporting period ending 30th June 2017, employee expenses, fertilizers, lease expense and other expenses amount to $50000.
Point 4: The fair value less estimated point of sale costs of the flowers immediately after picking and packing amount to $100000. Picking and packaging costs amount to $25000.
Required: Prepare the journal entries to record:
Question a) The cost incurred to maintain the biological assets;
Question b) The harvesting of the agricultural produce from the biological asset;
Question c) The sale of the agricultural produce and
Question d) The changes in the fair value of the biological assets between ends of the two reporting periods.
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