Ardlethan Limited owns an extensive vineyard that sells grapes directly to a number of local winemakers. The vines are currently recognised at $850,000. Costs incurred in maintaining the orchard in the current year amounted to $65,000. The fair value of the 2 tonne harvest {June 15th) after picking and packing amounted to $220,000. Picking and packing amounted to $7,000. One tonne of grapes was sold immediately upon harvest to Hardly Brothers with sales costs of $3000 and the second tonne was held as inventory. Unfortunately owing to a glut of grapes this season the value of the grapes halved by year end and the vineyards fair value dropped to $450,000 at year end. Prepare journal entries for Ardlethan's agricultural assets. Answer: 30/5/15 Dr expenses $65,000 Cr Cash $65,000 Dr loss on decrease in net market value of grapevines $400,000 Cr Grapevines $400,000 15/ 6/ 15 Dr Inventory $214,000 Cr Cash $7,000 Cr gain on harvest $207,000 Dr Cash $110,000 Cr sales revenue $110,000 Dr selling cost $3,000 Cr cash $3,000 Dr COGS $107,000 Cr Inventory $107,000 22/6/15 Dr impairment of inventory $53,500 Cr inventory $53,500 Note that inventory is measured at the lower of cost and net realisable value, hence the need to impair it at year end