Three 2-year-old dairy cows were purchased during the year ended 31 December 2016 for

€200 each. During the year ended 31 December 2017, a further three 2-year-old dairy cows were purchased for €220 each. Three calves were born on 31 December 2017. There were no sales of dairy cattle during 2016 or 2017.

The market prices of dairy cattle at 31 December 2016 and 2017 were as follows:

The costs to sell are negligible.
Requirement

(a) Calculate the value of the dairy herd at 31 December 2016 and 31 December 2017.

(b) Show and explain the accounting entries required to recognise the change in the value of the dairy herd from 31 December 2016 to 31 December 2017.

Transcribed Image Text:

Calf 2-year-old dairy cow 3-year-old dairy cow 2016 2017 70 95 200 220 230 250