SELF-TEST PRACTICE PROBLEMS
1. GOAT Company provided the following assets in a forest plantation and farm:
Freestanding trees 5,000,000
Land under trees 600,000
Roads in forests 300,000
Animals related to recreational activities 1,000,000
Bearer plants 1,500,000
Bearer animals 2,000,000
What total amount of the assets should be classified as biological assets?
a. 7,000,000
b. 8,500,000
c. 5,000,000
d. 8,000,000
For next two questions:
CHIKEN Company provided the following data:
Value of biological asset at acquisition cot on
December 31, 2018 600,000
Fair value valuation surplus on initial recognition at fair
Value on December 31, 2018 700,000
Change in fair value to December 31, 2019 due to
Growth and price fluctuation 100,000
Decrease in fair value due to harvest in 2019 90,000
2. What is the carrying amount of the biological assets on December 31, 2019?
a. 1,400,000
b. 1,490,000
c. 1,310,000
d. 1,300,000
3. What is the gain from change in fair value of biological asset that should be reported in the
2019 income statement?
a. 100,000
b. 10,000
c. 710,000
d. 800,000
4. SHEEP Company is engaged in raising dairy livestock. The entity provided the following
information during the current year:
Carrying amount on January 1 5,000,000
Increase due to purchases 2,000,000
Gain arising from change in fair value less cost of disposal
Attributable to price change 400,000
Gain arising from change in fair value less cost of disposal
Attributable to physical change 600,000
Decrease due to sales 850,000
Decrease due to harvest 200,000
What is the carrying amount of the biological asset on December 31?
a. 7,150,000
b. 6,950,000
c. 6,000,000
d. 8,000,000
For next two questions:
COW Company produced mild for sale to local and national producers. The entity began
operations at the beginning of current year by purchasing 650 milk cows for 8,000,000.
The entity provided the following information for the current year:
Acquisition cost, January 1 8,000,000
Change in fair value due to growth and price changes 2,500,000
Decrease in fair value due to harvest 250,000
Milk harvested during the year but not yet sold 400,000
5. What amount of gain on change in fair value should be recognized for biological asset in
the current year?
a. 2,250,000
b. 2,500,000
c. 2,650,000
d. 2,900,000
6. What amount of gain on change in fair value should be reported for agricultural produce in
the current year?
a. 2,250,000
b. 400,000
c. 0
d. 150,000
For next three questions:
HONEY Company has a herd of 10 2-year old animals on January 1, 2019. One animal
aged 2.5 years was purchased on July 1, 2019 for 108, and one animal was born on July 1,
2019. No animals were sold or disposed of during the year. The fair value less cost of
disposal per unit is as follows:
2 – year old animal on January 1 100
2.5 – year old animal on July 1 108
New born animal on July 1 70
2 – year old animal on December 31 105
2.5 – year old animal on December 31 111
New born animal on December 31 72
3 – year old animal on December 31 120
0.5 – year old animal on December 31 80
7. What is the fair value of the biological assets on December 31?
a. 1,320
b. 1,400
c. 1,440
d. 1,360
8. What amount of gain from change in fair value of biological assets should be recognized
in the current year?
a. 222
b. 332
c. 292
d. 300
9. What is the gain from change in fair value due to price change?
a. 292
b. 222
c. 237
d. 55
10. DOG Company is a producer of coffee. The entity is considering the valuation of harvested
coffee beans. Industry practice is to value the coffee beans at market value and uses as
reference a local publication “Accounting for Successful Farms”.
On December 31, 2018, the entity has harvested coffee beans costing 3,000,000 and with
fair value less cost of disposal of 3,500,000 at point of harvest.
Because of long aging and maturation process after harvest, the harvested coffee beans
were still on hand on December 31, 2019.
On such date, the fair value less cost of disposal is 3,900,000 and the net realizable value
is 3,200,000.
What is the measurement of the coffee beans inventory on December 31, 2017?
a. 3,000,000
b. 3,500,000
c. 3,200,000
d. 3,900,000
