Question

Unhygienix Limited also farms Rainbow Trout which it accounts for under NZ IAS 41 Agriculture. Record the appropriate journal entries for the following series of events for the year ending 31 December 2018.

• 23 April 100 Rainbow Trout are born. Each Trout is worth $5.

• As at the end of the year the Rainbow Trout are fully grown. The fair value of the Trout is $20 based on a pre-agreed price, but only 92 are alive.

Unhygienix Limited also farms Rainbow Trout which it accounts for under NZ IAS 41 Agriculture. Record the appropriate journal entries for the following series of events for the year ending 31 December 2018 23 April 100 Rainbow Trout are born. Each Trout is worth $5 As at the end of the year the Rainbow Trout are fully grown. The fair value of the Trout is $20 based on a pre-agreed price, but only 92 are alive.

Answer 1

IAS 41 Agriculture sets out the accounting for agricultural activity – the transformation of biological assets (living plants and animals) into agricultural produce (harvested product of the entity's biological assets). The standard generally requires biological assets to be merttieasured at fair value less costs to sell.

Journal entries:

   Imitial recognisation: Rainbow Trout inventory a/c Dr.    $500

   To Rainbow Trout Expense a/c    $500

Measurement: Rainbow Trout grown a/c Dr $ 1840

   Income statement (loss) a/c Dr $ 160

   To Rainbow Trout Inventory a/c $500

To Rainbow Trout a/c    $1500