CHAPTER 9 BIOLOGICAL ASSETS
9-1
(ABC Farms) (a) Carrying value of Biological Assets, 12/31/11 Cost of biological assets purchased during 2012 Fair valuation loss on initial recognition Change in fair value due to biological transformation and price fluctuations Decrease in fair value due to harvest Biological Assets, 12/31/12
(b)
9-2
Loss on initial recognition at FV less Cost to Sell Increase in FV less Costs to Sell
(Ranchero Corporation) (a) Balance of Biological Assets at December 31, 2011 3 years old = 2,000 x P44,000 P88,000,000 2 years old = 1,500 x P35,000 52,500,000 Increase in fair value 2,000 x (P55,000 – P44,000) P22,000,000 1,500 x (P47,000 – P35,000) 18,000,000 Balance, December 31, 2012 (at FV less Cost to sell)
(b)
(c)
P2,800,000 3,200,000 ( 150,000) 2,000,000 (1,000,000) P6,850,000 P 150,000 P2,000,000
P140,500,000
40,000,000 40 ,000,000 P180,500,000
Increase in FV less Cost to sell due to (1) Price Change : 3 year old cows 2,000 x (P47,000 – P44,000) 2 year old heifers 1,500 x (P37,500 – P35,000) Increase in FV due to Price Change
P6,000,000 3,750,000 P9,750,000
(2) Physical Change 4 year old cows 2,000 x (P55,000 – P47,000) 3 year old cows 1,500 x (47,000 – P37,500) Increase in FV due to Physical Change
P16,000,000 14,250,000 30,250,000
FV less Costs to sell at December 31, 2012 4 year old cows 2,000 x P55,000 3 year old cows 1,500 x P47,000 FV less POS costs at December 31, 2012
P110,000,000 70,500,000 P180,500,000
(d)
Entry at yearend Biological Assets 40,000,000 Gain – Increase in FV less CTS due to Price Change 9,750,000 Gain – Increase in FV less CTS due to Physical Change 30,250,000
(a)
Price Change 2 year-old animals on Jan. 1 10 x (P10,500 – P10,000) 2.5 year-old animal on July 1 1 x (P11,100 – P10,800) Animal born on July 1 1 x (P7,200 – P7,000) Change in FV less POS Cost due to Price Change
9-3
P5,000 300 200 P5,500
Chapter 9 – Biological Assets
Physical Change 3 year-old animals on 12/31 10 x (P12,000 – P10,500) 3 year old animal on 12/31 1 x (P12,000 – P11,100) Born on July 1 (upon birth) On December 31 P8,000 – P7,200 Change in FV less POS Cost due to Physical Change (b)
Entries for the Year 2012 July 1 Biological Assets Cash Purchased one animal. 1 Biological Assets Increase in FV less POS Cost due to Physical Change
P15,000 900 7,000 800 P23,700
10,800 10,800
7,000 7,000
Dec 31 Biological Assets 22,200 Increase in FV less POS Cost due to Price Change Increase in FV less POS Cost due to Physical Change (23,700 – 7,000) 31 Cash {2 x (13,500 – 1,500) Biological Assets (c)
(d)
MC1 MC2 MC3 MC4 MC5 MC6 MC7 MC15 MC16 MC17 MC18 MC19 MC20 MC21 MC22
5,500 16,700 24,000 24,000
Balance, 1/1/12 10 animals x P10,000 Purchase Change in FV less CTS due to Price Change Change in FV less CTS due to Physical Change (including the birth of one animal) Sale at FV less CTS Balance, December 31, 2012
P100,000 10,800 5,500 23,700 (24,000) P116,000
The balance at December 31, 2012 is composed of the following: 3 year old animals 9 animals x P12,000 P108,000 1 year old animal 1 animal x P8,000 8,000 Total P116,000 MULTIPLE CHOICE B MC8 B D MC9 A C MC10 B D MC11 B D MC12 B B MC13 C B MC14 A C 450,000 + 250,000 + 220,000 + 64,000 – 290,000 = 694,000 C 220,000 + 64,000 = 284,000 C {(15,000-13,000) x 25} +{ (7,000-5,000) x 5 } + (4,000 x 5) = 80,000 A {13,000 – 12,000) 25 + (5,000 – 4,000) x 5 = 30,000 D (25 x 15,000) + (5 x 7,000) = 410,000 B 30,000 + 80,000 = 110,000 B 5,000,000 – 50,000 = 4,950,000 A 10M + 4M + 800,000 + 1.5M – 2M – 0.5M =
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