Below is an extract from NZ King Salmon’s 2019 annual report. Record the journal entries for the recognition of any changes in fair value gain from biological assets for the 2019 financial year. Mortality is expensed directly and does not affect fair value gains or losses.

1. Biological transformation fair value is impacted by volume increases and fish weight at reporting date relative to the target fish harvest weight of 4 kgs (proportional recognition).

2. Harvested fair value is included in cost of goods sold in the statement of comprehensive income and is calculated by multiplying the current years harvest (biomass) by the prior years estimated gross margin per kg (recognised at 100%).

3 .Mortality cost is expensed directly to the statement of comprehensive income in the period which it occurs and is not subject to a fair value uplift.

4 .Changes in fair value are impacted by movements in margin primarily being changes in sales price and costs to sell (fish cost, harvest, processing and freight to market).

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Cost Fair Value Gain Biological assets $00 $000 As at 1 July 2018 42,667 36,787 Increase due to biological transformation 85,636 57,567 (66,468) (17,465) Decrease due to harvest ? (62,926) Decrease due to mortality Changes in fair value * 2,434 As at 30 June 2019 44,370 33,862 Cost Fair Value Gain Biological assets $00 $000 As at 1 July 2018 42,667 36,787 Increase due to biological transformation 85,636 57,567 (66,468) (17,465) Decrease due to harvest ? (62,926) Decrease due to mortality Changes in fair value * 2,434 As at 30 June 2019 44,370 33,862

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Answer Biological assets As at 1 July 2018 Increase d... View the full answer