Biological Assets
Problem 1
The following pertains to Bu Company, a company operating in a diverse agricultural activity.
Sheep P400,000
Felled trees 2,680,000
Harvested cane 1,160,000
Coconut trees 4,800,000
Dairy cattle 4,000,000
Cigarette 41,000
Sausages 20,000
Cured hams 36,000
Pig carcass 230,000
Fruit pickles 120,000
Trees in plantation forest 12,000,000
Harvested cabbage 40,000
Carpet 260,000
Grape vines 1,500,000
Picked grape fruit 180,000
Wool 160,000
Tea 38,200
Cotton 1,360,000
Plants 1,400,000
Thread 80,000
Carrots due to be harvested next week 200,000
Low fat milk 520,000
Wine 6,000,000
Picked fruit 49,400
Frozen lechon 120,000
Mango trees with ripe mango not yet harvested 1,400,000
Guard dogs 300,000
Animals in zoo (e.g., tigers, zebra, python, etc.) 24,000,000
Dinosaur statue in zoo 1,000,000
Ripe tomato ready for harvest 500,000
Strawberry plants 1,500,000
Compute the amount classified as either:
a. Biological assets
b. Agricultural produce
c. Inventory
d. Property, plant and equipment
Solution:
Sheep P400,000 Biological asset
Felled trees 2,680,000 Agricultural Produce
Harvested cane 1,160,000 Agricultural Produce
Coconut trees 4,800,000 PPE
Dairy cattle 4,000,000 Biological Asset
Cigarette 41,000 Inventory
Sausages 20,000 Inventory
Cured hams 36,000 Inventory
Pig carcass 230,000 Agricultural Produce
Fruit pickles 120,000 Inventory
Trees in plantation forest 12,000,000 Biological Asset
Harvested cabbage 40,000 Agricultural Produce
Carpet 260,000 Inventory
Grape vines 1,500,000 PPE
Picked grape fruit 180,000 Agricultural Produce
Wool 160,000 Agricultural Produce
Tea 38,200 Inventory
Cotton 1,360,000 Agricultural Produce
Plants 1,400,000 Biological Asset
Thread 80,000 Inventory
Carrots due to be harvested next week 200,000 Biological Asset
Low fat milk 520,000 Inventory
Wine 6,000,000 Inventory
Picked fruit 49,400 Agricultural Produce
Frozen lechon 120,000 Inventory
Mango trees with ripe mango not yet harvested 1,400,000 PPE
Guard dogs 300,000 PPE
Animals in zoo (e.g., tigers, zebra, python, etc.) 24,000,000 PPE
Dinosaur statue in zoo 1,000,000 PPE
Ripe tomato ready for harvest 500,000 Biological Asset
Strawberry plants 1,500,000 PPE
Sheep P400,000
Dairy cattle 4,000,000
Trees in plantation forest 12,000,000
Plants 1,400,000
Carrots due to be harvested next week 200,000
Ripe tomato ready for harvest 500,000
Total Biological Assets P18,500,000
Felled trees P2,680,000
Harvested cane 1,160,000
Pig carcass 230,000
Harvested cabbage 40,000
Picked grape fruit 180,000
Wool 160,000
Cotton 1,360,000
Picked fruit 49,400
Total agricultural produce P5,859,400
Cigarette P41,000
Sausages 20,000
Cured hams 36,000
Fruit pickles 120,000
Carpet 260,000
Tea 38,200
Thread 80,000
Low fat milk 520,000
Wine 6,000,000
Frozen lechon 120,000
Total inventory P7,235,200
Coconut trees P4,800,000
Grape vines 1,500,000
Mango tree with ripe mangos not yet harvested 1,400,000
Guard dogs 300,000
Animals in zoo (e.g., tigers, zebra, python, etc.) 24,000,000
Dinosaur statue in zoo 1,000,000
Strawberry plants 1,500,000
Total Property, plant and equipment P34,500,000
Problem 2
A herd of 10 2-year old animals was held at January 1, 2018. One animal aged 2 ½ years was purchased on July 1,
2018 for P1,080, and one animal was born on July 1, 2018. No animals were sold or disposed of during the period.
Per unit fair value less cost to sell were as follows:
January 1, 2018 July 1, 2018 December 31, 2018
New born animal P700 P720
½ year old animal 800
2-year old animal P1,000 1,050
2 ½ year old animal 1,080 1,110
3 year old animal 1,200
Determine:
a. Increase in fair value less cost to sell due to price change
b. Increase in fair value less cost to sell due to physical change
c. Fair value less cost to sell of herd on December 31, 2018
Solution:
Price change = (P1 – P0) (Q0)
Physical change = (P1(age1) – P1 (age0)) (Q1)
½ year old animal (New born animal on July 1) (720-700) x 1 20
3 year old animal (2 year old from Jan 1) (1,050-1000) x 10 500
3 year old animal (2 ½ years old from July 1) (1,110 – 1080) x 1 30
Total gain due to price change P550
½ year old animal (New born animal on July 1) (800-720) x 1 80
3 year old animal (2 year old from Jan 1) (1200-1050) x 10 1,500
3 year old animal (2 ½ years old from July 1) (1200-1110) x 1 90
Gain on initial recognition (newborn on July 1) (700 x 1) 700
Total gain due to physical change P2,370
3 year old animal 1,200 x 11 P13,200
1.2 year old animal 800 x 1 800
Carrying amount of biological asset 12/31/2018 P14,000
