Lynne-Melinda Ltd operates a large scale lavender farm supplying companies producing high quality essential oils in the Riverina region.On 30 June 2012 the farm was independently appraised and the lavender farm valued at $500 000.On 31 October 2012 lavender seed flowers that had a fair value less costs to sell of $100 000 were harvested and sold on the same day for the same amount.Picking costs and delivery charges to point-of-sale was $10 000.On 30 June 2013 the farm was valued at $550 000. What journal entry is required on 31 October 2012 to recognise the harvest of lavender seeds?
A)

\begin{array} { | l | l | l | l | } \hline \mathrm { Dr } & \text { Inventory-lavender } & \$ 100000 & \\\hline \mathrm { Cr } & \text { Revenue-harvest of lavender } & & \$ 100000 \\\hline\end{array}

\begin{array} { | l | l | l | l | } \hline \mathrm { Dr } & \text { Inventory-lavender } & \$ 110000 \\\hline \mathrm { Cr } & \text { Revenue-harvest of lavender } && \$ 110000 \\\hline\end{array}

\begin{array} { | l | l | l | l | } \hline \mathrm { Dr } & \text { Inventory-lavender } & \$ 100000 & \\\hline \mathrm { Cr } & \text { Lavender farm (asset) } & & \$ 90000 \\\hline \mathrm { Cr } & \text { Cash } & & \$ 10000 \\\hline\end{array}

\begin{array} { | c | l | l | l | } \hline \mathrm { Dr } & \text { Lavender farm (asset) } & \$ 100000 & \\\hline \mathrm { Cr } & \text { Revenue-harvest of oranges } & & \$ 90000 \\\hline \mathrm { CR } & \text { Cash } & & \$ 10000 \\\hline\end{array}

AASB 141 Excludes Certain Biological Assets from Its Scope

Multiple Choice

Correct Answer:VerifiedUnlock this answer nowGet Access to more Verified Answers free of chargeAccess For Free

Correct Answer:
Verified
Unlock this answer now
Get Access to more Verified Answers free of charge