Question

cate the direction of the misstatement for each you rations on April 1, e first month of oper- 9.7 (L02) (Valuation at Net Realizable Value) Matsumura Dairy began operations on April with the purchase of 200 milking cows for Y6,700,000. It has completed the hrst month of ons and has the following information for its milking cows at the end of April 2019 (yen in thousandal Milking cows Change in fair value due to growth and price changes* ¥(200,000) Decrease in fair value due to harvest (12,000) Milk harvested during April 2019 (at net realizable value) 72,000 *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 Matsumura's biological asset (milking cows) for the month of April 2019. b. Prepare the journal entry for the milk harvested by Matsumura during April 2019, c. Matsumura sells the milk harvested in April on the local milk exchange and receives 474,000. Pre- pare the summary journal entry to record the sale of the milk.

Answer 1

In the books Matsumara , Journal entries for April 2019
		(Yen in thousands)	(Yen in thousands)
Date	Particulars	Debit	Credit
01/04/2019	Biological assets Account	67,00,000
	To Cash /Bank Account		67,00,000
	(Being Assets Brought out)
30/04/2019	Provision for Amortisation	2,00,000
	To Biological assets Account		2,00,000
	(Being Provision created for amortisation for change in value of asset)
30/04/2019	Harvest Exp	12,000
	To Biological assets Account		12,000
	(Being expense debited to profit and loss account toward decrease in value of assets)
30/04/2019	Stock in Purchase (Milk Harvested)	72,000
	To Biological assets Account		72,000
	(Being sales in account of milk harvested)
30/04/2019	Cash/Bank Account	74,000
	To Sales Account		74,000
	(Being sales in account of milk harvested)