Agri purchased a vineyard in April 2019 for $1,250,000. The purchase was risky because the growing season was coming to an end, the grapes must be harvested in the next several weeks and Agri has limited experience in carrying off a grape harvest . At the end of the first quarter of operations Agri is felling pretty good about his early results. The first harvest was a success; 500 bushels of grapes were harvested with a value of $50,000 and given the strong yield from area vineyards during this season, the net realisable value of Agri’s vineyard has increased by $25,000 at the end of the quarter. After storing the grapes for a short period of time, agri was able to sell the entire harvest for $60,000. Determine the total effect on income for the quarter related to the vineyard’s biological asset asset and agricultural produce

Agri purchased a vineyard in April 2019 for $1,250,000. The purchase was risky because the growing season was coming to an end, the grapes must be harvested in the next several weeks and Agri has limited experience in carrying off a grape harvest . At the end of the first quarter of operations Agri is felling pretty good about his early results. The first harvest was a success; 500 bushels of grapes were harvested with a value of $50,000 and given the strong yield from area vineyards during this season, the net realisable value of Agri’s vineyard has increased by $25,000 at the end of the quarter. After storing the grapes for a short period of time, agri was able to sell the entire harvest for $60,000. Determine the total effect on income for the quarter related to the vineyard’s biological asset asset and agricultural produce

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 21P

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