Sunland Dairy began operations on April 1, 2020, with purchase of 200 milking cows for...
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Sunland Dairy began operations on April 1, 2020, with purchase of 200 milking cows for $6,860,000. It has completed the first month of operations and has the following information for its milking cows at the end of April 2020.
| Milking cows | |||
| Change in fair value due to growth and price changes | $(192,000) | ||
| Decrease in fair value due to harvest | (12,800) | ||
| Milk harvested during April 2020 (at net realizable value) | 80,000 | ||
a. Prepare the journal entries for Sunland's biological asset (milking cows) for the month of April 2020.
b. Prepare the journal entry for the milk harvested by Sunland during April 2020.
c. Sunland sells the milk harvested in April on the local milk exchange and receives $80,000. Prepare the summary journal entry to record the sale of the milk for cash.
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