Greenview Dreams Ltd has an orchard of mango trees with an estimated fair value at 1 January 20X1 of $1 600 000.During the year ended 31 December 20X1 mangoes with a fair value of $300 000 were picked and they were still on hand at the end of the year.Costs of picking,sorting,packing and storage totaled $125 000.The mangoes were sold later in 2012 for $430 000.On 31 December 20X1 the mango orchard had an estimated net realisable value of $1 750 000.The total profit from operations for the 20X1 year is:

Question

Quizplus · Accepted Answer

The profit from operations is calculated as the change in the fair value of the orchard plus the profit from the mangoes. The increase in the orchard's value is $150,000 ($1,750,000 - $1,600,000). The profit from the mangoes is $175,000 ($300,000 fair value - $125,000 costs). Total profit is $325,000 ($150,000 + $175,000).

Greenview Dreams Ltd Has an Orchard of Mango Trees with an Estimated