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    Biological Assets

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    plantationarkana

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    © All Rights Reserved
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    Biological Assets

    Uploaded by

    plantationarkana
    7 views2 pages

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    Biological-Assets

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    Biological Assets

    Uploaded by

    plantationarkana

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    © All Rights Reserved
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    CPA REVIEW SCHOOL OF THE PHILIPPINES

    Manila

    FINANCIAL ACCOUNTING AND REPORTING VALIX/VALIX/ESCALA/SANTOS/DELA CRUZ


    BATCH 92 OCTOBER 2022 CPALE

    BIOLOGICAL ASSET

    1. An entity produces milk for local ice cream producers. The entity began operations at the beginning of
    current year by purchasing milking cows for P5,000,000. The entity provided the following information
    at year-end relating to the milking cows:

    Carrying amount – beginning of year 5,000,000


    Increase in fair value due to growth and price change 2,000,000
    Decrease in fair value due to harvest 250,000
    Newborn calf at year-end at fair value 400,000
    Milk harvested during the year but not yet sold 850,000

    1. What amount of gain on biological asset should be reported in the current year?
    a. 2,400,000
    b. 2,150,000
    c. 3,000,000
    d. 3,250,000

    2. What amount of gain on agricultural produce should be recognized in the current year?
    .

    a. 1,250,000
    b. 1,000,000
    c. 850,000
    d. 0

    3. What is the carrying amount of the biological asset at year-end?


    a. 8,000,000
    b. 8,250,000
    c. 7,150,000
    d. 7,600,000

    2. An entity provided the following assets in a forest plantation:


    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
    Agricultural produce growing on bearer plants 800,000
    Agricultural produce harvested 1,200,000

    1. What total amount should be classified as biological assets?


    a. 7,800,000
    b. 7,000,000
    c. 7,500,000
    d. 8,500,000

    2. What total amount should be included in property, plant and equipment?


    a. 5,400,000
    b. 3,400,000
    c. 2,900,000
    d. 1,900,000

    7034
    Page 2

    3. An entity is engaged in raising diary 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 due to price change 400,000
    Gain arising from change in fair value less cost of disposal due to physical change 550,000
    Decrease due to sales 850,000
    Decrease in fair value due to harvest 200,000
    1. What amount should be reported as biological asset on December 31?
    a. 6,900,000
    b. 7,000,000
    c. 7,950,000
    d. 6,700,000
    2. What amount should be reported as net gain from biological asset?
    a. 950,000
    b. 750,000
    c. 100,000
    d. 350,000
    4. On January 1, 2021, an entity has a herd of 100 2-year old animals. Ten animals aged 2.5 years were
    purchased on July 1, 2021 for P11,000 each. Ten animals were born on July 1, 2021. No animals were
    sold or disposed of during the year. The fair values less cost of disposal per unit were:
    2-year old animal on January 1 10,000
    2.5-year old animal on July 1 11,000
    New born animal on July 1 8,000
    2-year old animal on December 31 11,500
    2.5-year old animal on December 31 12,000
    Newborn animal on December 31 8,500
    3-year old animal on December 31 15,000
    0.5-year old animal on December 31 10,000

    1. What amount should be reported as biological assets on December 31, 2021?


    a. 1,750,000
    b. 1,800,000
    c. 1,650,000
    d. 1,500,000

    2. What is the total gain from change in fair value of biological asset?
    a. 640,000
    b. 560,000
    c. 650,000
    d. 190,000

    3. What is the gain from biological asset attributable to price change?


    a. 475,000
    b. 635,000
    c. 555,000
    d. 165,000

    4. What is the gain from biological asset attributable to physical change?


    a. 395,000
    b. 250,000
    c. 350,000
    d. 475,000

    End
    7034

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