PLEASE DETERMINE THE RESEARCH QUESTIONS FOR YOUR CLIENT HALL WINERY? {EXAMPLE:when or how should Hall winery report ____ on the income statement? , What value should they report for Income statement?, when or where should they ___ on the B/S or I/S? ETC}

Hall Winery Hall Winery (the Company) is a privately-owned company that manufactures wine in the Napa Valley. The company controls the entire wine-making process from growing the grapes to bottling the wines for sale. Last year (2018) the Company had operating income of $3,055,125. The winery consists of 270 acres of vineyards and a facility which wine is processed and stored. The vineyard is able to produce 500 bottles of wine per acre, and the company has traditionally been able to sell each bottle for $65. The vines were purchased from a nursery for $4 million and cost an additional $2 million to plant. The vines were planted in 2011 and required 3 years to develop to the point of producing grapes. The annual cost incurred during the development period was $1.75 million which includes stakes, wires, labor, and watering. The vines will continue to produce grapes for an additional 20 years after they begin producing grapes. The cost to remove and dispose of the vines after grape production ceases is approximately $1 million. Grapes are harvested each year in March and processing into wine occurs over 3 years. The wine making process consists of 3 stages. The first stage is harvesting the grapes, smashing them into a liquid, and placing the liquid in barrels (takes 2 months to complete and costs $400,000). The second stage is the fermentation process where wine is stored in the barrels (takes 32 months and costs $1.5 million). In the third and final stage, wine is bottled and packaged for sale (takes 2 months to complete and costs $600,000). Hall winery initially records all costs of the wine making process as inventory which is valued using the LIFO method. The Company also incurs annual costs of $600,000 to maintain the soil and irrigation pipes of the vineyard. This cost is reported on the income statement as maintenance expense. Each annual batch of wine produced by the company is usually entirely sold off by the time the next year's wine making process begins. In March of 2019, a new crop of grapes started to grow that was expected to be harvested in March of 2020. However, in December of 2019, a wildfire occurred in the Napa Valley. Unfortunately, the entire vineyard suffered severe smoke-damage. The company brought in wine experts to assess the damaged vineyard once the fire was extinguished. The wine experts determined that the future annual output of the grape vines would certainly decrease by 75%. Additionally, it is probable that the remaining useful life of the grapevines will decrease by 30%. The quality of grapes produced in future years will not change, however it is more than likely that the wine (sold in 2023) made from grapes (on the vine in 2019) exposed to the fire will sell for 50% less than Hall's wine traditionally does. The costs of the wine making process will also decrease by 20% due to a reduction in the quantity of grapes produced. Determine the research questions for your client Hall Winery