PROBLEMS Problem 13-1 (IFRS) Forester Company provided the following assets in a forest plantation and farm: Freestanding trees 5,000,000 ~ Land under trees 600,000 ~ Roads in forest 300,000 — Animals related to recreational activities 1,000,000 — Bearer plants 1,500,000 — Bearer animals 2,000,000 ~ Agricultural produce growing on bearer plants 800,000 — Agricultural produce harvested 1,200,000 Plant with dual use 1,400,000 — 1. What total amount should be reported as biological aeste? ond 2m eo 1. dh a. 7,800,000 b. 7,200,000 > 8,400,000 d.}) 9,200,000 2. What total amount should be included in property, plant juipment? = 7! an seme {907 41M 1 [an . 4,600,000 3,400,000 c. 1,800,000 d. 4,200,000Problem 13-2 (IFRS) Joan Company provided the following data: Value of biological asset at acquisiton cost on December 31, 2021 6,000,000 Fair valuation surplus on initial recognition at fair . value on December-31, 2021 500,000 —~ Increase in fair value on December 31, 2022 due to ‘owth and price fluctuation 900,000 —~ Decrease in fair value due to harvest in 2022 (100,00 ) , December 31, 2022? 2, i) 7,400,000 & 7,300,000 7,500,000 |. 6,500,000 2. What amount of net gain from change in fair value of biological asset should be reported in the 2022 income statement? At = wr Gram Cin?) (7 ec. 900,000 _4 800,000 1. What is the carrying amount of the ee on Problem 18-8 (IFRS) Salve 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 00,000 Decrease due to sales Tre 850,000 Decrease due to harvest 200,000 What is the carrying amount of the biological, n, ecember 312 GSU 6,950,000 5. 6,000,000 ©. 8,000,000 4. 7,150,000 365Problem 13-4 (IAA) Legend Dairy produced milk for local ice cream peruse, The entity began operations at the beginning of current year by purchasing milking cows for P2,000,000. The entity provided the following information at year-end relating to the milking cows: Carrying amount — beginning 2,000,000 Change in fair value due to growth and price change 400,000 < Decrease in fair value due Wrtmmrvest _ 50,000 @ Newborn calf at year-end at fair value 200,000 ~ Milk harvested during the year butnot yet. sold— 250,000 ~ 1. What amount of net gain on biological asset should be reported in the current-year? ~sv 2 SWV,IP) a. 400,000 Any TH207 oe b. 350,000 ,000 50,000 2. What amount of gain on agricultural produce should be reported in the current year? a./ 250,000 . 200,000 c. 600,000 d. 650,000 3. What is the carrying amount of the biological asset. year-end? » yl / DT Z 2 wy. a. 2,000,000 b)) 2,400,000 2,550,000 © d. 2,800,000Problem 13-5 (IAA) Africa Company purchased 2,000 lamas at the beginning of current year. These llamas will be sheared semiannually and their wool sold to specialty clothing manufacturers. The llamas Were purchased for P5,000,000. During the current year, the change in fair value due to growth and price change is P350,000, the wool harvested but not yet sold is valued at net realizable value of P100,000 and the decrease in fair value due to harvest is P50,000. What is the carrying amount of the biological asset at year-end? or Desoom 2 1 750) - Dy b. 5,400,000 c. 5,400,000 d. 5,100,000 Problem 13-6 (IFRS) Jamaica Company is a producer of coffee. On December 31, 2021, the entity harvested coffee beans with fair value less cost of disposal of P3,500,000 at the point of harvest. Because of long aging and mati the harvested coffee beans wete 31, 2022. After harvest, on December On such date, the fair value less cost of disposal is P3,900,000 and the net realizable value is P3,200,000. What amount should be reported as coffee beans inventory on December 31, 2022? a. 3,000,000 3,500,000 / 3,200,000 d. 3,900,000 367 LlamasProblem 13-7 (IFRS) On January 1, 2017, Farm Company planted trees on its aa The entity purchased the land two years ago aaa P1,000,000. The trees were considered bearer Denon had accumulated cost of P500,009 on December 3 By January 1, 2022, the trees had matured and were expected to bear produce for a period of 5 years. ae On December 31, 2022, the trees produced fruits with fair Value less cost of disposal on such date at P50,000. There was no harvest during 2022 On December 31, 2023, the fruits were harvested and the fair value less cost of disposal on such date was P75,000. . —~ oe eee 1. What is the carrying amount of the property, plant and equipment on December 31, 2022? SH any Wr me ee ie (ny dof 4 . 1,000,001 K & 10,000 /4y 2. What is the carrying amount of the biological asset on December 31, 2022? a. 550,000 450,000 @) 50,000 E 0 3. What amount should be reco; gnized as gain from eae praduse for the year ended December 31, a. 15,000 RT - 257. 50,000 -/ 25,000 e 0Problem 13-8 (IFRS) At the beginning of th ‘e current year, Hi d a herd of 19 2-year year, Honey Company hai old animals, One animal. aged 2.5 years was purchased on July 1 for P108, and one animal a a” was born on July 1, No animals were sold or disposed of during the year. Fair value less cost of disposal per unit 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 Newborn animal on December 31 72 #3 ~ year old animal on December 31 120 - (9.5 year old animal on December 31 80 1. What amount should be reported as fair value of the biological assets on December. 31? 1,400 VX 2p = Tw a. b. 1/320 c. 1,440 IxX@> fp a&: “13604 oe 2, What amount of gain {com change ih feir-valueYot biological assets should be recognized in the current Year? — % I0X/ = is Ke Ln a 222 WM / XY = ov. b. 292 ) Jo c. 300 es d. 332 ab ie , * Wea kas Ph ya a. 292 (eae ca? 2 fA = : Bb. 208). Top > (fs) (O's Pope kl 22 23} 269“ Problem 13-9 (IFRS) current year: Cash Trade and other receivables Inventories -Dairy livestock — immature - Dairy livestock — mature Property, plant and equipment, net Trade and other payables Note payable — long-term Share capital Retained earnings — beginning “Fair value of milk produced ~ + Gain from change in fair value » Inventories used ~ » Staff costs 7 Depreciation expense “ 4 Other operating expenses “ Income tax expense % 1. What amount should be reported current year? a. 650,000 600,000 © 130,000 185,000 2. What amount should be reported a: assets at year-end? 550,000 450,000 ¢. 500,000 d. 400,000 mi PY} 120,000 yy 15,000 * an 90,000 DT +4 Dairy Company provided the following information for the 500,000 1,500,000 100,000 50,000 400,000 1,400,000 eee 1,500,001 1,000, O00 800, 000 600, 000 GS), 50,000. MW. 140,000 (ee) fair value of biological = ZO 2Problem 13-10 (IAA) Farmland Company has different kinds of farm animals at the beginning of current year. During the current year, several acquisitions occurred related to these farm animals. Carrying amount on January 1: 15 Horses qa E year old ) 1,000,000 10 Dairy cattle (2 years old ) 400,000 8 Carabaos (2.5 years old ) 200,000 20 Hogs (3 years old ) 500,000 2,100,000“ Purchases on June 30: 4 Dairy cattle (1 year old) 150,000 6 Carabaos (6 months old ) 100,000 250,000 ~ Fair value less cost of disposal on December 31: -15 Horses (1 year old) 1,200,000 10 Dairy cattle (2 years old) 520,000 8 Carabaos (2.5: years old ) 250,000 20 Hogs (3. years old ) 550,000 4 Dairy cattle (1 — year old) 170,000 6 Carabaos (6 mooie old ) 110,000 2,800,000“ Fair value less cost of disposal on December 31: 15 Horses (2 years old) 1,350,000 10 Dairy cattle (3 years old ) 580,000 8 Carabaos (3.5 years old ) 290,000 20 Hogs (4 years old ) 600,000 4 Dairy cattle (1.5 years old ) 200,000 6 Carabaos (1 year old) 140,000 » 3,160,000 There were no farm animals sold during the year and neither ll were there any newborns nor deaths. 3711. What is the carrying amount of the biological assets on @) aca 31? e orerae a.) 3,160,000 . 2,350,000 c. 2,800,000 d. 2,380,000 2. What amount should be reported as gain from change in fair value attributable to Brice change? 810,000 Du. al- Oe) b.7 450,000 3 = 21320, = s¢0-000 |W -2IM t 2007 a. 0 “Far 3. What amount should be reported as gain from change in fair value attributable to physical change? Ase BAT - 2,em7T 2 Buon ¢Y 360,000 700,000 Problem 13-11 (IAA) At the beginning of the current year, Divine Company purchased a vineyard costing P6,000,000. It was determined W that the grape Vines can prod for a period of SByeats.— During the year, the ent Mies cost of disposal of P: grapes were sold fo! operating expenses of 500,000.» (4 1. What amount should be reported as ae income on sales? >\ 3,500,000 re . , J eae fe (2: Meet ¢. 2,000,000 A a. 175000 + (Ube 2. What amount ehpula Pe Poperted as preta: net_income? a. 1,250,000 2,750,000 XV et 2,250,000 ~ 3,000,000 9°22 pes with a fair value end of the year, the — he entity incurred 7D)Problem 13-12 Multiple choice (PAS 41) 1. Biological assets found only in Biotech entities. /Are living animals or living plants and must be disclosed s a separate line item in the statement of financial position. c. Must be measured at cost. d. Do not generally have future economic benefit. 2. It is the management by an entity of the biological transformation and harvest of biological asset for sale or for conversion into agricultural produce or into additional Ooo asset. ._/Agricultural activity b. Biological activity c. Economie activity d. Development activity 3. Biological transformation results from asset changes through all of the following, except a. Growth b. Degeneration c. Procreation ©) Production of agricultural produce 4. Agricultural activity results in which of the following type of asset? a. Biological asset é Agricultural produce Biological asset and agricultural produce Neither biological asset nor agricultural produce 5. Agricultural activity includes all of the following, exes a. Raising livestock b. Perennial cropping c. Aquaculture (® Ocean fishing6. Which statement is true about biological assets? a. Biological assets are measured at fair value less cost of disposal. 5 : b. When fair value cannot be determined reliably, the biological asset shall be measured at coat less accumulated depreciation and impairment. ¢. There is a rebuttable presumption that the fair value of biological asset can be measured reliably. _ ./ All of these statements are true about biological assets. 7. Agricultural produce is @) The harvested product from biologicél asset. © b. Measured at the time of harvest at the cost of production. c. Measured at each reporting period at fair value less cost of disposal. / 4. All of the choices are correct regarding agricultural produce. 8. Agricultural produce as it grows on bearer plant is measured at the end of each reporting period prior to harvest at Fair value Fair value less cost of disposal c Fair value plus cost of disposal d. Pair value less cost of disposal at the point of harvest 9. Agricultural produce harvested from bearer plant is measured at ae Fair value (b> Fair value less cost of disposal at the point of harvest €. Cost of production less cost of disposal d. Fair value plus cost of disposal at the point of harvest 10. The harvested agricultural produce is a. Accounted for as inventory b. Initially recognized at fair value less cost of disposal _ at the point of harvest. q Recorded as gain from change in fair value of agricultural produce. @)al of these are correct about harvested agricultural _ produce.problem 13-13 Multiple thoice (FRS) 1, Abearer plant is a living plant that a. Is used in the producticn or supply of agricultural produce. b, Is used to bear produce for more than one period, c._Has a remote likelihood of being sold as agicuitural roduce, except for incidental scrap sales. _ d. ‘Must possess all of these characteristics, 2. All of the following can be considered bearer plant, except a. Coconut tree b. Grape vine c. Rubber tree (Gyre in a forest plantation to be harvested and sold as log or lumber 3. A living plant with a dual use is classified as a~ Bearer plant DBiological asset c. Investment property d. Inventory 4. According to IASB, bearer plants are accounted for as Biological assets with disclosure iological assets without disclosure roperty, plant and equipment. . Noncurrent investment 5. Mature bearer plant is measured using a. Cost model Revaluation model ‘ither cost model or revaluation model d. Either cost model or fair value model +6. According to IASB, bearer animals are accounted for as > Biological assets b. Propety, plant and equipment c. Investment property d. Agricultural produce 7. Animals related to recreational activities are classified as a. Biological asset .. )Property, plant and equipment & Investment property d. Intangible asset 8. Generally speaking, biological assets relating to agricultural activity shall be measured using a. Historical cost Historical cost less depreciation less impairment A fair value approach d. Net realizable value 9. Which of the following criteria must not be satisfied before a biological asset can be recognized? a: The entity controls the asset as a result of past event. b. It is probable that future economic benefits relating to the asset will flow to the entity. An active market for the asset exists. d. The fair value can be measured reliably. 10. Land that is related to agricultural activity is measured | At fair value. Op accordance with PAS 16, Property, Plant and juipment, or PAS 40, Investment Property. c. At fair value in combination with the biological asset. d. At the resale value separate from the biological asset.Problem 13-14 Multiple choice (IFRS) 1. Anentity had a plantation forest that is lik ] ely to be harvested and sold in 30 years. The income shall be accounted for in which of the following? a, No income shall be reported annually until first harvest. (©) Income shall be measured annually and reported using a fair value approach. c. The eventual sale proceeds shall be estimated and recognized over the 30-year period. d. The plantation forest shall be measured every 5 years 2. Where the fair value of the biological a ae jetermined reliably, the asset shall be measured at a. Cost Cost less accumulated depreciation .”)Cost less accumulated depreciation and impairment loss . Net realizable value 3. Again or loss arising on the initial recgonition from a change in the fair value biological asset shall be included in Profit or loss for the period. b. Other comprehensive income. c. A separate revaluation reserve. d. An appropriation reserve. 4, Where there is a long aging or maturation process after harvest, the accounting shall be dealt with by ~ PAS 41, Agriculture ch) Pas 2, Inventories . “ PAS 16, Property, plant and equipment d. PAS 40, Investment property 5. When agricultural produce is harvested, the harvest shall accounted for as inventory at The fair value less cost of disposal at point of harvest ‘he historical cost Fi 7 The historical cost less accumulated impairment loss e. d. Fair value