How much is the increase in fair value of biological assets

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Reference no: EM132798642

Problem - During 2019, you were asked to audit the Goat Farm operations of MJ Inc. MJ owns and operates a goat farm that qualifies to be accounted for as Agriculture under PAS 41. On December 31, 2019, the biological assets are:

Purchased before January 1, 2019

3 years old

1,260 Goats

Purchased on January 1, 2019

2 years old

180 Kids

Purchased on July 1, 2019

1.5 years old

450 Kids

There was no other transaction during the year concerning the biological assets. No animals were born during the year and no animals were sold during the year. Given below is the date regarding the selling price and cost to sell of the biological assets.

January 1, 2019:

Selling Price

Cost to Sell

1 yr old

1,900

100

2 yr old

2,480

80

July 1, 2019:

 

 

1 yr old

1,850

50

December 31, 2019:

 

 

1 yr old

2,000

80

2 yr old

2,800

100

1.5 yr old

2,200

40

3 yr old

3,500

500

Required -

1. How much is the increase in fair value of biological assets due to physical change?

2. How much is the increase in fair value of biological assets due to price change?

Reference no: EM132798642

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