UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF ACCOUNTANCY AND MANAGEMENT

ACADEMIC YEAR 2022/2023

TUTORIAL 12
Agriculture Accounting

Question 1
Dena Agro Sdn Bhd raises 2000 cattle in its farm in Kuala Selangor. The
company slaughters the cattle at its abattoirs and sells the carcasses in local
market.

Explain whether the above activated are within the scope of MFRS 141
Agriculture

Question 2

On 1 January 2014, Nona Farm Berhad purchased 1,000 sheep at a cost of

RM500,000. The company’s financial year end is 31 December. It is
estimated that the fair value of sheep in the market on 31 December 2014 is
RM515,000. The company estimates that commission to dealers is about
RM3,000 if the decide to sell the sheep.

Discuss the accounting treatment.

Question 3

Refer Q2. Assume now the company incurred the transportation cost of
RM2,000 to bring the sheep to the market. How to record the transaction as at
31 December 2014?

Question 4

Nona Fruity Bhd. owns 20 acres of durian orchards. The company’s activities
include planting and managing the durian trees, such as pruning, irrigation,
fertilizer, application, pest and disease control, flower thinning and assisted
pollination. The company uses durian fruits to produce a variety of durian food
products, such as durian ice-cream, frozen durian pulp and crunchy durian
roll. The company exports the processed products to Indonesia, Brunei and
Singapore.

Explain whether the above activities are within the MFRS 141.
Question 5

Coco Best Farm Bhd. raises 8,000 dairy cattle in its farm in Melaka. The
market value of dairy cattle is calculated by reference to the litres of milk able
to be produced and the lactation rate of the cattle. At the end of each year,
Coco Best Farm Bhd. sells 1,000 mature cattle and 500 young cattle at the
agro market in Johor Bahru. The transportation costs to bring the cattle to the
market are RM1,050 per truck. Coco Best Farm needs 5 trucks to transport
the cattle because the normal capacity per truck is approximately 300 cattle.
The latest market values of dairy cattle are given as follows:

• Mature cattle: 5,000 litres x lactation rate (0.5) x price of milk (RM0.45) =
RM1,125.
• Young cattle: 2,000 litres x lactation rate (0.5) x price of milk (RM0.45) =
RM450.

Calculate the fair value of cattle for Coco Best Farm Bhd.