Summer Rubber Estate Bhd (SREB) is a rubber estate company located in Sepang, Selangor. The company has 20-hectare land acquired in the year 2012 and planted with rubber trees. After seven years, the rubber trees are mature and will produce latex for the next 20 years. The latex is sold to rubber manufacturers for commercial processing. Once the rubber trees stop producing latex, the trees will be cut down and sold as scrap.
In addition, SREB is also involved in livestock farming and raises a herd of goats and kids near the plantation. On 30 June 2020, the company had 100 goats aged above 2 years old, 50 kids aged 2 months old, and 20 kids born a week ago.
On 1 May 2021, the company managed to sell 20 goats aged above 2 years old at RM950/unit and 10 kids aged 12 months old at RM500/unit. The operating expenses incurred for livestock farming during the year were RM5,500. On 15 May 2021, the nannies gave birth to 10 kids.
Additional information:
1. The fair value of the goats and kids as of 30 June 2020 and 30 June 2021 are stated below:
2. The kid becomes a goat at the age of 13 months old and the female goat (nanny) gives birth to the kid when it reaches the age of 15 months old. The company usually sells the goats in the principal market at the age of 15 months old, whereas the kids could be sold when they turn into 7 months old.3. The financial year-end for the company is 30 June each year.

REQUIRED:
(Show details of workings)

(a) Identify the type of assets and explain its measurement basis for the following items:
(i) Mature rubber trees
(ii) Latex
(iii) Goat
(b) Prepare all related journal entries for livestock farming for the year ended 30 June 2021.

(c) Discuss the disclosure requirements for the fair value of biological assets that were previously measured at cost less any accumulated depreciation and any accumulated impairment losses becomes reliably measurable during the current period.
 

Transcribed Image Text:

30 June 2020 30 June 2021 (per unit) 450 (per unit) 530 Kid (below 13 months old) Goat (above 2 years old) Goat (below 2 years old) 900 995 750 815 30 June 2020 30 June 2021 (per unit) 450 (per unit) 530 Kid (below 13 months old) Goat (above 2 years old) Goat (below 2 years old) 900 995 750 815

Answer rating: 100% (QA)

a Type of assets Mature rubber trees Property plant and equipment Latex Inventory Goat Biological asset Measurement basis Mature rubber trees Fair val... View the full answer