Farmer Sheffield Industries Inc. is in the business of producing organic foods for sale to restaurants and in local markets. The company uses IFRS and has a June 30 fiscal year end. As an experiment, the company has decided to try raising organic free-range chickens. On May 1, 2023, Farmer Sheffield purchased 80 new hatchlings for cash at a total cost of $780. The company paid cast for feed and labour costs of $120 per month to look after the chicks. Their (acceptable) accounting policy is to capitalize these costs. On June 30, the company estimated that the chickens would mature in mid-October. At year end, the chickens had a fair value of $1,400, and the company would have to transport them to its customers at an average cost of $3 per chicken. On October 30, all 80 chickens had matured and the company sold and shipped 50 of the chickens to one of its key customers for $30 per chicken. Transportation costs were $3 per chicken, as expected. Prepare the journal entries to record the inventory activity relating to the chickens for the month of May. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit
Farmer Sheffield Industries Inc. is in the business of producing organic foods for sale to restaurants and in local markets. The company uses IFRS and has a June 30 fiscal year end. As an experiment, the company has decided to try raising organic free-range chickens. On May 1, 2023, Farmer Sheffield purchased 80 new hatchlings for cash at a total cost of $780. The company paid cast for feed and labour costs of $120 per month to look after the chicks. Their (acceptable) accounting policy is to capitalize these costs. On June 30, the company estimated that the chickens would mature in mid-October. At year end, the chickens had a fair value of $1,400, and the company would have to transport them to its customers at an average cost of $3 per chicken. On October 30, all 80 chickens had matured and the company sold and shipped 50 of the chickens to one of its key customers for $30 per chicken. Transportation costs were $3 per chicken, as expected. Prepare the journal entries to record the inventory activity relating to the chickens for the month of May. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Farmer Sheffield Industries Inc. is in the business of producing organic foods for sale to restaurants and in local markets. The company
uses IFRS and has a June 30 fiscal year end.
As an experiment, the company has decided to try raising organic free-range chickens. On May 1, 2023, Farmer Sheffield purchased 80
new hatchlings for cash at a total cost of $780. The company paid cast for feed and labour costs of $120 per month to look after the
chicks. Their (acceptable) accounting policy is to capitalize these costs.
On June 30, the company estimated that the chickens would mature in mid-October. At year end, the chickens had a fair value of
$1,400, and the company would have to transport them to its customers at an average cost of $3 per chicken.
On October 30, all 80 chickens had matured and the company sold and shipped 50 of the chickens to one of its key customers for $30
per chicken. Transportation costs were $3 per chicken, as expected.
Prepare the journal entries to record the inventory activity relating to the chickens for the month of May. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles
and enter o for the amounts. List all debit entries before credit entries.)
Date Account Titles and Explanation
May 1
Debit
Credit
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