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In 2016, Toucan Limited established and commenced operation of a Flower business in Suva. The trees were planted in 2008, and began producing saleable flowers
In 2016, Toucan Limited established and commenced operation of a Flower business in Suva. The trees were planted in 2008, and began producing saleable flowers in 2017. In 2018, 80% of the flowers are sold, immediately after they are picked, for a sale price of $144000. Selling costs are assumed to be immaterial. The remaining 20% of the picked flowers are recognized as inventories at the end of the reporting period. The fair value less the estimated point of sale costs of the flower trees at 30th June 2017 (the end of the previous reporting period) was $142500 and at 30th June 2018, S163500. During the reporting period ending 30th June 2018, employee expenses, fertilizers, lease expense and other expenses amount to $60000. The fair value less estimated point of sale costs of the flowers immediately after picking and packing amount to $180000. Picking and packaging costs amount to $45000 Required: Prepare the journal entries to record: a) The cost incurred to maintain the biological assets; b) The harvesting of the agricultural produce from the biological asset; c) The sale of the agricultural produce and d) The changes in the fair value of the biological assets between ends of the two reporting periods
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