Question

In: Accounting

Buzz Bee Yard Company’ Apiary began operations on January 1, 2020, with the purchase of 100...

Buzz Bee Yard Company’ Apiary began operations on January 1, 2020, with the purchase of 100 bee hives for $500 total. Buzz follows IFRS and its standard on agricultural products. It has completed the first year of operations and has the following information for its bee hives at December 31, 2020:

Bee Hives – purchase of hives as per above $ 500
Honey harvested during 2020 (at net realizable value) 1,900
Honey sold during 2020 (at net realizable value) 1,600
Hive maintenance costs directly traceable to hive activity in year $60
Company general administration costs $40
Fair value on Dec. 31, 2020 of hives $1,300

Required:

Prepare all the journal entries for Buzz’s bee hives activities for 2020, as per the information in (a) to (f).

Expert Solution

Journal Entries

a) Bilogical asset (Bee Hive) A/C ........Dr. $500

To Cash A/c $500

( Being biological asset acquired)

b) Inventory (Honey) A/c ....................Dr. $1900

To Profit and Loss A/c $1900

( Being agriculture produce harvested recorded at fair value. )

c) Cash A/c ....................................Dr. $1600

To Sales A/c $1600

(Being inventory of honey sold)

d) Hive Maintainence cost A/c ............Dr. $60

To Cash $60

( Being maintenance charges incurred recorded)

e) Admin cost a/c ...............................Dr. $40

To Cash $40

( Being admin cost incurred)

f) Bilogical asset a/c ....................Dr. $800

To gain - change in fair value a/c $800

( Being Bilogical asset revalued at fair value at year end)

ekkarill92 answered 2 years ago

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