Nerang Orange Farms Ltd has orange tress which on 30 June 2009 had a fair value of $1,600,000.On 30 April 2010,oranges with an estimated market value of $300,000 were picked.The costs of picking,sorting and packing paid in cash amount to $150,000.The oranges were sold on the same day for $310,000.An independent valuation on 30 June 2006 report that the estimated fair value of the orange trees is $1,500,000.What is the journal entry to recognise the harvest of oranges on 30 April 2010? What is the net profit of Nerang Orange Farms Ltd for the year ending 30 June 2010 to conform with the provisions of AASB 141 "Agriculture"?

Question

Quizplus · Accepted Answer

The net profit from the harvest is calculated as the market value of the oranges ($300,000) minus the costs of picking, sorting, and packing ($150,000), resulting in a profit of $150,000. However, since the oranges were sold for $310,000, the actual profit from the sale is $310,000 - $150,000 = $160,000. The journal entry for the harvest would recognize the fair value of the harvested produce, which is $300,000, and the net profit is the difference between the fair value and the costs, which is $60,000.

Nerang Orange Farms Ltd Has Orange Tress Which on 30