Reference no: EM132916875

1. As well as the wool from its own sheep, at December 31,2021, Boy Macho Farming Co. also held wool that it had purchased from three other farms at a cost of 30,000 bucks. The fair value less costs to sell of this wool was determined to be 32,000 bucks at December 31,2021. This wool was subsequently sold 29,000 bucks (after deducting costs to sell) on march 2,2022.

Questions:

-Is the wool purchased from the third party covered under PAS 41?
-At what value is the purchased wool carried on the balance sheet?---------
Boy Macho Farming Co. also grows wheat and sometimes enters into contracts for future sales of the wheat.

Questions:

-While the wheat is still growing, Boy macho farming co. enters into a contract for the future sale of 120 tons of wheat at 480 bucks per ton. Before the year-end, it harvests 100 tons of wheat at a time when the fair value less costs to sell of the wheat 500 bucks per ton. What is the value that must be used for the preparation of the financial statements?

2. While the wheat is still growing, Boy Macho Farming Co. enters into another contract for the future sale of 120 tons of wheat at 550 bucks per ton Before the year-end, it harvests 50 tons of wheat at a time when the fair value loss costs to sell of the wheat is 500 bucks per ton. At the year-end this value had declined to 480 bucks per ton. The financial statements are drawn up before any of the wheat has been sold, and the value has by then recovered to 490 bucks per ton. What is the value that must be used for the preparation of the financial statements?

3. A herd of 10-2- year old animals was held at January 1,2021. One animal aged 2 ½ years was purchased on July 1,2021 for ?1,080, and one animal was born on July 1,2021. No animals were sold or disposed of during the period. Per unit fair values less costs to sell were as follows:

Jan. 1,2021 July 1,2021 Dec. 31,2021
New born animal ?700 ?720
½ year old animal 800
2-year old animal ?1,000 1,050
2½ Year old animal 1,080 1,110
3-year old animal 1,200

Questions:

-How much is the increase in fair value less estimated costs to sell due to price change?
-How much is the increase in fair value less estimated costs to sell due to physical change?
-How much is the fair value less estimated costs to sell of herd at December 31,2021?