Whispering Winds's Christmas Tree Farm Ltd. grows pine, fir, and spruce trees. The farm cuts and sells trees during the Christmas season and exports most of the trees to the United States. The remaining trees are sold to local tree-lot operators. It normally takes 12 years for a tree to grow to a suitable size, and the average selling price of a tree is $29. The biggest costs to the business are pest control, fertilizer, and pruning trees over the 12-year period. These costs average $12 per tree (assume these are incurred evenly over the 12-year growing cycle). Assume IFRS is used. Assume that the fair value less cost to sell (net realizable value) at the end of 2020 is $12 and the opening value was $7. Assume that the cost to sell are nil. Prepare the journal entries if the costs are capitalized each year. (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.) Account Titles and Explanation Debit Credit (Capitalize costs)

Whispering Winds's Christmas Tree Farm Ltd. grows pine, fir, and spruce trees. The farm cuts and sells trees during the Christmas season and exports most of the trees to the United States. The remaining trees are sold to local tree-lot operators. It normally takes 12 years for a tree to grow to a suitable size, and the average selling price of a tree is $29. The biggest costs to the business are pest control, fertilizer, and pruning trees over the 12-year period. These costs average $12 per tree (assume these are incurred evenly over the 12-year growing cycle). Assume IFRS is used. Assume that the fair value less cost to sell (net realizable value) at the end of 2020 is $12 and the opening value was $7. Assume that the cost to sell are nil. Prepare the journal entries if the costs are capitalized each year. (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.) Account Titles and Explanation Debit Credit (Capitalize costs)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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