Question 21 (1 point) Laffy Farms Corp. (Laffy), a publicly accountable entity, is growing half an acre of cannabis in its east field. Laffy incurred costs of planting in May 2020, including seedlings and labour, of $28,000. At the time of planting, the cannabis seedlings had a fair value of $18,000. The cannabis are expected to be harvested and sell for $90,000 in August 2020 and Laffy expects to incur additional costs of $12,000 prior to harvest. There are no costs to sell. Assuming that cannabis seedlings are a biological asset, how should the seedlings be measured at initial recognition? a) Capitalized for $28,000. b) All costs related to the planting should be expensed. c) Capitalized for $50,000. d) Capitalized for $18,000. Question 22 (1 point) I LILULILLO. Question 20 (1 point) For entities that report using IFRS, what is an example of bearer plants? a) Broccoli plants that are grown and harvested for six months. Ob) Strawberry plants that are grown and harvested for three years. O c) Grapes that have been harvested and will be sold to customers without processing. d) Flowers that will be cut to be sold to make bouquets. Question 21 (1 point) Laffy Farms Corp. (Laffy), a publicly accountable entity, is growing half an acre of cannabis in its east field. Laffy incurred costs of planting in May 2020, including seedling Question 18 (1 point) For entities that report using IFRS, how are exploration and evaluation assets subsequently measured? a) Using the cost or revaluation model. b) Using the cost model or fair value model. 2 C) Using the cost model. 15 d) Using the cost model or depreciation model. 18 Question 19 (1 point) For entities that report using IFRS, which of the following is an example of agricultural produce? 21 a) Butter produced from pasteurized cow's milk. 24 b) Peach trees grown for the peaches. c) Yarn produced from sheep's wool. d) Felled trees. Question 17 (1 point) Scully Mining Company (SMC) is mining for natural gas in northern British Columbia and has incurred the following costs: Prospecting costs $55,000 Miscellaneous exploration and evaluation costs 120,000 Land purchase costs 570,000 Equipment purchased for extraction 135,000 Labour related to development and extraction 280,000 Overhead costs allowed to be allocated to the extraction process 190,000 Total $1,350,000 SMC is a public company that reports using the IFRS framework. Which of the following is true regarding the treatment of costs? a) Exploration and evaluation costs of $120,000 must be expensed. b) SMC could capitalize $470,000 as inventory. c) Equipment purchased for extraction of $135,000 is capitalized as an exploration and evaluation asset. d) The prospecting costs of $55,000 are capitalized as an exploration and evaluation asset
