Awana Bhd is an agriculture company that manages oil palm plantation and cows farming.

Originally, ten (10) cows were bought at a cost of RM2,000 each in year 2015. The cows give birth to calf when they reach 2 years old. The cows can produce large amount of milk throughout its lifetime. The milk produced will be sold to other local manufacturer and the cows will be sold when they turn into 10 years old.

The following information is related to the agriculture activities incurred during financial year 2019:

1. Currently, the company breeds 49 cows with different ages. In March 2019, there is a contagious disease related to cows and pushes the price of cows down. The following is the comparative fair value of cows at beginning and ending of the financial year ended 2019:   

           

	Quantity	1 July 2018 (RM per animal)	30 June 2019 (RM per animal)
5 year-old cows	10	4,500	4,000
3 year-old cows	15	3,500	3,200
1 year-old cows	24	1,800	1,200

The average cost to sell the cows is estimated to be RM100 and RM120 per cow for the year ended 2018 and 2019 respectively.

2. The company produced 30,000 litres of milk during the financial year. The market price for milk is RM5 per litre and the cost incurred to sell milk is estimated to be 2% of the market price.

The company’s financial year ends on 30 June every year.

Q. How should AB record the purchase of the cows in 2015? Dr __________ and Cr Cash [Fill in the blank with the account name and amount. E.g. Rental RM20,000].

Q. Determine the FV gain/loss on biological assets on 30 June 2019. RM____________. [Indicate whether it is a gain or loss by stating as ‘Dr Amount’ for loss or ‘Cr Amount’ for gain. E.g. Cr 1,000]

The journal entries related to the cows are, Q21-22:

Q: Dr __________________ (Indicate only the account name)

Q: Cr __________________ (Indicate only the account name)

The journal entries related to the milk are, Q23-24:

Q: Dr __________________ (Indicate the account name and amount like: Rental RM1,000)

Answer rating: 100% (QA)

Journal entries in the book ... View the full answer