QUESTION

Beefie Company has a herd of $600$ cattle which are all six months old on $31$ December $2023$ and a herd of $400$ sheep which are all one year old at $31$ December $2023.$ The herd of cattle will be sold when the cattle are two years old. The herd of sheep is expected to be sold within the next $12$ months. There are two markets available to Beefie in which they could sell the cattle and the sheep, Market $1$ and Market $2.$ Market $1$ is the principal market in which cattle could be sold but Beefie sells its sheep in both Market $1$ and Market $2$ in an approximately equal proportions. Therefore, neither Market I nor Market $2$ can be identified as the principal market in which Beefie could sell its sheep. Relevant market prices and relevant costs of sale at $31$ December $2023$ are as follows:

$\backslash$table$[[,$Market $1,$Market $2],[,$Cattle,Sheep,Cattle,Sheep$],[$Gross selling price per unit $($RM$),1,450,600,1,600,700],[$Transport costs per unit $($RM$,25,15,35,25],[$Selling costs per unit $($RM$),10,15,20,20]]$

Required:

$($a$)$ Briefly explain the requirement for subsequent measurement of the biological assets under MFRS $141$ Agriculture.

$(2$ marks$)$

$($b$)$ Based on the information provided above, advise Beefie on how to compute the value of cattle at the end of the year. $($Hint: biological asset should be valued based on its principal market price$)$

$(4$ marks$)$

$($c$)$ There are two markets available to sell the sheep, and Beefie sells its sheep in both markets. Advise Beefie on how it could identify the principal market for its sheep and compute the value of the sheep at the end of the year. $($Hint: principal market is the most advantageous market for the company$)$

$(8$ marks$)$

$1$

$($d$)$ Explain whether Beefie's cattle and sheep should be presented under current or non$-$current assets in the statement of financial position as at $31$ December $2023.$ Justify your answers.

$(2$ marks$)$

$($e$)$ Prepare an extract of the Statement of Financial Position as at $31$ December $2023$ for Beefie Berhad, showing clearly the different categories of biological assets that the company has.

$(4$ marks$)$