Alton Downs Ltd Has an Orchard of Citrus Trees with an Estimated

question 10

Multiple Choice

Alton Downs Ltd has an orchard of citrus trees with an estimated net realisable value at 1 January 20X1 of $1 600 000.During the year ended 31 December 20X1 fruit with an estimated fair value of $300 000 was picked.The fruit was still on hand at the end of the year.Estimated sales commission on this fruit was .Costs of picking,sorting,packing and storage totalled $125 000.The fruit was sold in 20X2 (after the 20X1 financial statements were prepared) for $430 000.On 31 December 20X1 the orange orchard had an estimated net realisable value of $1 550 000.The fruit on hand at 31 December 20X2 should be valued at:
$$\$ 25000$$

• A) $300 000
• B) $275 000
• C) $125 000
• D) $475 000

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Definitions:

Normal Good

A good for which demand increases as the income of consumers increases, and vice versa.

Income

Revenue generated on a regular basis from labor or investments.

Demand Curve

A graph showing how the quantity demanded of a commodity changes as its price varies.

Demand Curve

A graphical representation depicting the relationship between the price of a good or service and the quantity demanded by consumers.