Background Tarheel Farm, Inc. (TFI) is a corporation involved in agricultural production and has a June 30 financial year-end. It is not publicly traded, but is required to prepare annual financial statements for its bank. Historically, the bank has required that these statements comply with US GAAP rules. Currently, the bank is allowing its clients to report using IFRS instead of US GAAP, if they prefer. TFI typically produces three products: beef cattle, corn and winter wheat. Recently, TFI also started growing a number of hibiscus plants. All four of these products have a life cycle of less than one year. The following information is available as of June 30: ►TFI had 400 acres of field corn planted. The corn will not be harvested until the fall. The accumulated cost of the corn is $95,000. The estimated selling costs are $4,500. The current land costs are $5,000 per acre. Although there is no current market value available for land growing a corn crop on it, TFI is certain that this land would sell for more than $2,200,000.
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