1.)The We Like Chicken Company raises chickens from hatching until they become p

Question

1.)The We Like Chicken Company raises chickens from hatching until they become productive hens. The company is preparing financial statements for its first year of operations and has come to you for assistance on the proper accounting for the chickees. Each hen has a useful life of two years, after which they are sold to Campbell’s Soup Company, with the exception of one hen who receives a Presidential pardon each year at Easter. The President of the Company believes that the cost of the egg producing hens should be included in inventory because they represent “goods available for resale.” The Controller believes that the hens should be classified as property, plant and equipment because they are like machinery that is used to produce the inventory of eggs. Using the codification system, research the issue for your client

Explanation / Answer

i believe both the president and controllers words to be truth if u take presidents words into consideration because without the basic money for buying and managing the hens there wouldnt be a industry in the first place . so if i were in presidents place i would definetly include the cost of the egg producing hens . they are really goods for resale ar it can be sold for any chicken selling shop or as said to some soup company also when coming into controllers place i think his isde view is also correct . as they are like a machine , with proper maintainance they produce good quality eggs and in better cases healthy chicks for furthering thier buisness . indeed they are like a plant . but of them must keep in view that every machine or plant has an usuable period over which the machinery (hens) will lose its demand and importance and its value too . so if above mentioned points can be taken into good consideration i think u will have a good deal of buisness

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