The document contains multiple accounting problems related to biological assets under IFRS. It includes details on the classification and valuation of various biological assets, such as trees, coffee beans, dairy livestock, and milk, held by several companies. The problems assess the ability to calculate carrying amounts, gains or losses from fair value changes, and inventory measurements based on fair value less cost to sell.
The document contains multiple accounting problems related to biological assets under IFRS. It includes details on the classification and valuation of various biological assets, such as trees, coffee beans, dairy livestock, and milk, held by several companies. The problems assess the ability to calculate carrying amounts, gains or losses from fair value changes, and inventory measurements based on fair value less cost to sell.
The document contains multiple accounting problems related to biological assets under IFRS. It includes details on the classification and valuation of various biological assets, such as trees, coffee beans, dairy livestock, and milk, held by several companies. The problems assess the ability to calculate carrying amounts, gains or losses from fair value changes, and inventory measurements based on fair value less cost to sell.
ABC Company provided the following assets in a forest
plantation: Freestanding trees 25,500,000 Land under trees 3,000,000 Roads in forests 1,500,000 Animals related to recreational activities 5,000,000 Bearer plants- rubber trees and grape vines 7,500,000 What total amount of the assets should be classified as biological assets? a. 25,500,000 b. 38,000,000 c. 33,000,000 d. 42,500,000
Problem 35-2 (IFRS)
ABC Company is a producer of coffee. The entity is considering the valuation of harvested coffee beans at market value and uses as reference a local publication Accounting for Successful Farms. On December 31, 2015, the entity has harvested coffee beans costing P15,000,000 and with fair value less cost of disposal of P17,500,000 at the point of harvest. Because of long aging and maturation process after harvest, the harvested coffee beans were still on hand on December 31, 2016. On such date, the fair value less cost of disposal is P19,500,000 and the net realizable is P16,000,000. What is the measurement of the coffee beans inventory on December 31, 2016? a. 15,000,000 b. 17,500,000 c. 16,000,000 d. 19,500,000
Problem 35-3 (IFRS)
ABC Company provided the following data: Value of biological asset at acquisition on December 31, 2015 3,000,000 Fair valuation surplus on initial recognition at fair value on December 31, 2015 3,500,000 Change in fair value on December 31, 2016 due to growth and price fluctuation 500,000 Decrease in fair value due to harvest in 2016 450,000
1. What is the carrying amount of the biological asset on
December 31, 2016? a. 7,000,000 b. 6,550,000 c. 6,500,000 d. 7,450,000 2. What is the gain from change in fair value of biological asset that should be reported in the 2016 income statement? a. 500,000 b. 4,000,000 c. 3,550,000 d. 50,000
Problem 35-4 (IFRS)
ABC Company is engaged in raising dairy livestock. The entity provided the following information during the current year: Carrying amount on January 1 25,000,000 Increase due to purchases 10,000,000 Gain arising from change in fair value less cost of disposal attributable to price change 2,000,000 Gain arising from change in fair value less cost of disposal attributable to physical change 3,000,000 Decrease due to sales 4,250,000 Decrease due to harvest 1,000,000 What is the carrying amount of the biological asset on December 31? a. 34,750,000 b. 30,000,000 c. 40,000,000 d. 35,750,000
Problem 35-5 (IAA)
ABC Company produced milk for sale to local and national ice cream producers. The entity began operations at the beginning of the current year by purchasing 650 milk cows for P40,000,000. The entity provided the following information for the current year:
Acquisition cost, January 1 40,000,000
Change in fair value due to growth and price changes 12,500,000 Decrease in fair value due to harvest 1,250,000 Milk harvested during the year but not yet sold 2,000,000
1. What amount of gain in change on fair value should be
recognized for biological asset in the current year? a. 12,500,000 b. 11,250,000 c. 14,500,000 d. 13,250,000 2. What amount of gain on change in fair value should be reported for agricultural produce in the current year? a. 11,250,000 b. 2,000,000 c. 750,000 d. 0
Problem 35-6 (IFRS)
ABC Company has a herd of 10 2-year old animals on January 1, 2016. One animal aged 2.5 years was purchased on July 1, 2016 for 540, and one animal was born on July 1, 2016. No animals were sold or disposed of during the year. The fair value les cost of disposal per unit is as follows: 2-year old animal on January 1 500 2.5-year old animal on July 1 540 New born animal on July 1 350 2-year old animal on December 31 525 2.5-year old animal on December 31 555 Newborn animal on December 31 360 3-year old animal on December 31 600 0.5-year old animal on December 31 400
1. What is the fair value of the biological assets on December
31? a. 7,000,000 b. 6,600,000 c. 7,200,000 d. 6,800,000 2. What amount of gain from change in fair value of biological assets should be recognized in the current year? a. 1110 b. 1,460 c. 1,500 d. 1,660 3. What is the gain from change in fair value due to price change? a. 1,460 b. 1110 c. 1185 d. 275
Problem 35-7 (IFRS)
ABC Company produces milk on its farms. The entity produces 20% of the communitys milk that is consumed. Farmland Company owns 5 farms and had a stock of 2,100 cows and 1,050 heifers. The farms produce 800,000 kilograms of milk a year and the average inventory held is 15,000 kilograms of milk. However, on December 31,2016 the entity is currently holding 50,000 kilograms of milk in powder. On December 31, 2016, the biological assets are: Purchased before January 1, 2016 (3 years old) 2,100 cows Purchased before January 1, 2016 (2 years old) 300 heifers Purchased on July 1, 2016 (1.5 years old) 750 heifers No animals were born or sold during the current year. The unit fair value less cost of disposal is as follows. January 1, 2016: 1-year old 15,000 2-year old 20,000 July 1, 2016 1-year old 15,000 December 31, 2016: 1-year old 16,000 2-year old 22,500 1.5-year old 18,000 3-year old 25,000 The entity has had problems during the year. Contaminated milk was sold to customers. As a result, milk consumption has gone down. The entitys business is spread over different parts of the country. The only region affected by contamination was Batangas. However, the cattle in this area were unaffected by the contamination and were healthy. There are 600 cows and 200 heifers in the Batangas farm and all these animals had been purchased on January 1, 2016. 1. What is the fair value of biological assets in January 1, 2016? a. 46,500,000 b. 48,000,000 c. 42,000,000 d. 36,000,000 2. What is the fair value of biological assets purchased on July 1, 2016? a. 11,250,000 b. 15,000,000 c. 18,750,000 d. 16,875,000 3. What is the fair value of biological assets on December 31, 2016? a. 72,750,000 b. 78,750,000 c. 76,125,000 d. 59,250,000 4. What is the increase in fair value of biological assets on December 31, 2016? a. 15,000,000 b. 26,250,000 c. 24,750,000 d. 30,150,000 5. What is the increase in fair value of biological assets due to physical change? a. 6,300,000 b. 8,700,000 c. 15,000,000 d. 7,200,000
Problem 35-8 (IFRS)
ABC Company provided the following information for the year ended December 31, 2016: Cash 2,500,000 Trade and other receivables 7,500,000 Inventories 500,000 Dairy livestock- immature 250,000 Dairy livestock- mature 2,000,000 Property, plant and equipment, net 7,000,000 Trade and other payables 2,600,000 Note payable- long-term 7,500,000 Share capital 5,000,000 Retained earnings- January 1 4,000,000 Fair value of milk produced 3,000,000 Gain from change in fair value 250,000 Inventories used 700,000 Staff costs 600,000 Depreciation expense 75,000 Other operating expenses 950,000 Income tax expense 220,000
1. What is the net income for 2016?
a. 3,250,000 b. 3,000,000 c. 650,000 d. 925,000 2. What is the fair value of biological assets on December 31, 2015? a. 2,750,000 b. 2,250,000 c. 2,500,000 d. 2,000,000