Question

П. Akimora Dairy began operations on April 1, 2015, with purchase of 250 milking cows for ¥8,500,000. It has completed the first month of operations and has the following information for its milking cows at the end of April 2015 (000 omitted). Milking cows ¥(250,000) Change in fair value due to growth and price changes* Decrease in fair value due to harvest (15,000) Milk harvested during April 2015 (at net realizable value) 90,000 *Due to a very high rate of calving in the past month, there is a glut of milking cows on the market. Instructions (a) Prepare the journal entries for Akimora's biological asset (milking cows) for the month of April 2015. (b) Prepare the joumal entry for the milk harvested by Akimora during April 2015. (c) Akimora sells the milk harvested in April on the local milk exchange and receives ¥93,000.

Answer 1

Requirement Accounts Debit Credit ¥265,000.00 ¥265,000.00 Unrealised Holding Gain/ Loss A/C Biological Assets A/c (Cows) ( Change in fair value due to Growth + Change in fair value due to Harvest = 250000+15000) \ 90,000.00 Inventory A/C Unrealised Holding Gain/ Loss A/C ¥ 90,000.00 \ 93,000.00 ¥ 90,000.00 Cash A/C Cost of Goods Sold Inventory A/C Sales A/C \ 90,000.00 \ 93,000.00 (Revenue of 93000 generated by selling inventory of 90000 and received cash 93000)