Question Details

Prepare the journal entries for Akimora- biological asset 



Ex. 1—LCNRV—Journal Entries
Dover Company began operations in 2010 and determined its ending inventory at cost and at a LCNRV at December 31, 2010, and December 31, 2011. This information is presented below.
					     Cost      		Net Realizable Value
		12/31/10		£520,000			£485,000
		12/31/11		  615,000			  585,000

Instructions
	(a)	Prepare the journal entries required at December 31, 2010, and December 31, 2011, assuming that the inventory is recorded at LCNRV, using a perpetual inventory system and the cost-of-goods-sold method.
	(b)	Prepare the journal entries required at December 31, 2010, and December 31, 2011, assuming that the inventory is recorded at cost, using a perpetual system and the loss method.
	(c)	Which of the two methods above provides the higher net income in each year?
Ex. 2 -Valuation at Net Realizable Value.
Akimora Dairy began operations on April 1, 2010, 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 2010 (000 omitted).
	Milking cows
		Change in fair value due to growth and price changes*	¥(250,000)
		Decrease in fair value due to harvest				    (15,000)
	Milk harvested during April 2010 (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- biological asset (milking cows) for the month of April 2010.
	(b)	Prepare the journal entry for the milk harvested by Akimora during April 2010.
	(c)	Akimora sells the milk harvested in April on the local milk exchange and receives ¥93,000.




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