PT Milkisu produced milk for sale to local and national cream producers. The entity began operations at a beginning of current year by purchasing 500 milk cows for CU8,000,000 The entity had the following information available at year-end relating to the cows: Carrying amount of milking cows, Jan 1 at 8,000,000 Change in fair value due to growth and price change at 900,000 Decrease in fair value due to harvest at 200,000 Milk harvested during the year but not sold at 400,000 Required: Discuss and prepare journal entries: 1. To record the acquisition of milking cows 2. To record the net gain from the change in fair value of the milking cows
CASE – AGRICULTURE
Part 1.
PT Milkisu produced milk for sale to local and national cream producers. The entity began operations at a beginning of current year by purchasing 500 milk cows for CU8,000,000
The entity had the following information available at year-end relating to the cows:
Carrying amount of milking cows, Jan 1 at 8,000,000
Change in fair value due to growth and price change at 900,000
Decrease in fair value due to harvest at 200,000
Milk harvested during the year but not sold at 400,000
Required:
Discuss and prepare
1. To record the acquisition of milking cows
2. To record the net gain from the change in fair value of the milking cows
3. To record the gain from change in fair value of agricultural produce
Part 2.
Discuss and answer these questions:
1. Is the natural breeding of animals in zoos and game parks agricultural activity?
2. Is ocean fishing agricultural activity?
3. Is palm plantation agricultural activity? Describe the accounting treatment for biological assets and agricultural products in oil palm plantations
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