Highland Packers (HP) is a breeder of llamas. Llamas are camel-like animals that are naturally found in the Andes Mountains in South America. They have been domesticated for some time for use as pack animals to carry heavy loads. Their fur can also be used, similar to sheep??s wool. Llamas grow to maturity and become fertile around 30??36 months of age. They continue to be reproductive for the next 15 years. On average, each female gives birth to one cria (a baby llama) each year. Due to their hardiness in mountainous areas, HP is breeding llamas to rent and to sell as hiking companions to carry the hikers?? equipment. The company has a December 31 year-end and it follows IFRS for its accounting. HP entered the llama business in early 2010. Shortly after incorporation, the company paid $400,000 to purchase 10 pairs of three-year old llamas from a Chilean ranch. HP allocated 75% of the cost to the llamas and 25% for the specialized knowledge obtained from the Chilean ranch for breeding and raising llamas. HP??s owners believe that the knowledge has value over 10 years, the period of time necessary to make their ranch fully operational by breeding the llamas to a sufficiently large number. At the end of 2013, the company??s balance sheet reported $520,000 for the llamas, composed of the following:

The fair values in this table are based on HP??s estimates. These estimates indicate that the value of a newly mature (three-year-old) llama remains stable at $15,000 each. Prior to that point, a cria increases in value evenly over the three years. After reaching maturity, the llamas decline in value evenly over 15 years. During 2014, the company did not have any sales, as all of the llamas are currently being raised for reproductive purposes. The company incurred the following costs during the year:

• Feed and labour: $90,000
• Depreciation on building (barn): $30,000At the end of 2014, the company??s llama population had increased to 65, as follows:

Required:a. HP??s management believes the estimates of fair value made in 2013 continue to be valid at the end of 2014. Estimate the fair value of HP??s biological assets at the end of 2014.b. Record the journal entries relating to HP??s biological and intangible assets for 2014. Assume that the company follows IFRS.

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Llama age (rounded to whole years) Quantity Fair value per llama Total 7 years $11,000 $220,000 20 3 years 10 15,000 150,000 2 years 10 10,000 100,000 1 year 10 5,000 50,000 Total 50 $520,000