CHAPTER 9 BIOLOGICAL ASSETS
9.1 (ABC Farms)
(a) Carrying value of Biological Assets, 12/31/08 P2,800,000
Cost of biological assets purchased during 2009 3,200,000 Fair valuation loss on initial recognition ( 150,000) Change in fair value due to biological transformation and
Decrease in fair value due to harvest (1,000,000) Biological Assets, 12/31/09 P6,850,000
(b) Loss on initial recognition at FV less POS Cost P 150,000
Increase in FV less POS Costs P2,000,000
9.2 (Ranchero Corporation)
(a) Balance of Biological Assets at December 31, 2008
3 years old = 2,000 x P44,000 P88,000,000
2 years old = 1,500 x P35,000 52,500,000 P140,500,000
Increase in fair value 2,000 x (P55,000 – P44,000) P22,000,000 1,500 x (P47,000 – P35,000) 18,000,000 40,000,000 Balance, December 31, 2009 (at FV less POS Cost) P180,500,000 (b) Increase in FV less POS Cost due to
(1) Price Change :
3 year old cows 2,000 x (P47,000 – P44,000) P6,000,000
2 year old heifers 1,500 x (P37,500 – P35,000) 3,750,000 Increase in FV due to Price Change P9,750,000
(2) Physical Change
4 year old cows 2,000 x (P55,000 – P47,000) P16,000,000
3 year old cows 1,500 x (47,000 – P37,500) 14,250,000 Increase in FV due to Physical Change 30,250,000 (c) FV less POS Costs at December 31, 2009
4 year old cows 2,000 x P55,000 P110,000,000
3 year old cows 1,500 x P47,000 70,500,000
FV less POS costs at December 31, 2009 P180,500,000 (d) Entry at yearend
Gain – Increase in FV less POS Cost due to Price Change 9,750,000 Gain – Increase in FV less POS Cost due to Physical Change 30,250,000
9-3
(a) Price Change
2 year-old animals on Jan 1 10 x (P10,500 – P10,000) P5,000 2.5 year-old animal on July 1 1 x (P11,100 – P10,800) 300 Animal born on July 1 1 x (P7,200 – P7,000) 200 Change in FV less POS Cost due to Price Change P5,500
Trang 2Physical Change
3 year-old animals on 12/31 10 x (P12,000 – P10,500) P15,000
3 year old animal on 12/31 1 x (P12,000 – P11,100) 900 Born on July 1 (upon birth) 7,000
On December 31 P8,000 – P7,200 800 Change in FV less POS Cost due to Physical Change
P23,700
(b) Entries for the Year
2009
Purchased one animal
1 Biological Assets 7,000
Increase in FV less POS Cost due to Physical Change 7,000
Increase in FV less POS Cost due to Price Change 5,500
Increase in FV less POS Cost due to Physical Change
31 Cash {2 x (13,500 – 1,500) 24,000
Biological Assets 24,000 (c) Balance, 1/1/09 10 animals x P10,000
P100,000 Purchase 10,800 Change in FV less POS Cost due to Price Change
5,500
Change in FV less POS Cost due to Physical Change
(including the birth of one animal) 23,700 Sale at FV less POS cost
(24,000)
Balance, December 31, 2009
P116,000
(d) The balance at December 31, 2009 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
MULTIPLE CHOICE
1 B
2 B
Trang 3MC6 B MC1
4 C MC15 C 450,000 + 250,000 + 220,000 + 64,000 – 290,000 = 694,000 MC16 C 220,000 + 64,000 = 284,000
MC17 C {(15,000-13,000) x 25} +{ (7,000-5,000) x 5 } + (4,000 x 5) =
80,000 MC18 A {13,000 – 12,000) 25 + (5,000 – 4,000) x 5 = 30,000
MC19 D (25 x 15,000) + (5 x 7,000) = 410,000
MC20 B 30,000 + 80,000