BIOLOGICAL ASSETS

Problem 1
The books of Monteclaire Farms, Inc. for the year ended December 31, 2016 showed the following
journal entries related to biological assets:
Biological assets 4,000,000
Cash 4,000,000
Biological assets 3,700,000
Gain from change in FV of bio assets 3,700,000
Cash 4,200,000
Gain on Sale 4,200,000
Further examination revealed the following:
FV less point of sale cost of biological assets at December 31, 2015 P 3,500,000
Biological assets acquired during the period
Purchase price 4,000,000
FV less point of sale cost upon purchase 3,900,000
Gain arising from change in fair value less point of sale costs
due to price changes 1,200,000
due to physical changes 2,500,000
Sale of biological assets 4,200,000
Prepare all the necessary adjusting/correcting entries to reflect the given transactions.

Problem 2
A herd of 20, 2-year old animals was held on January 1, 2017. Five animals, aged 2.5 years old, were
purchased on July 1, 2017. On the same date, four animals were born. Ten animals were sold at
December 31, 2017, aged 3 years old, at fair value. Per unit fair value less estimated point of sale
costs were as follows:
January 1, 2017
2 year old animal P15,000
July 1, 2017
New born animal 8,000
2.5 year old animal 20,000
December 31, 2017
New born animal 8,500
0.5 year old animal 9,500
2 year old animal 16,500
2.5 year old animal 23,000
3 year old animal 28,000

The company prepared the following entries:

Biological assets 100,000
Cash 100,000
Biological assets 41,000
Gain on change in FV of bio assets 41,000
Cash 280,000
Biological assets 280,000

Prepare all the necessary adjusting/correcting entries to reflect the given transactions.
RETAIL INVENTORY METHOD

Given information:
Cost Retail
Beginning inventory 180,000 250,000
Net purchases 1,500,000 2,070,000
Additional markup 250,000
Markup cancellation 35,000
Markdown 140,000
Markdown cancellation 10,000
Sales 1,750,000
Sales returns 40,000
Sales allowances 10,000
Sales discounts 25,000
Employee discounts 50,000
Spoilage and breakage 45,000

Compute the estimated ending inventory using the following methods:

a. Conservative
b. Average cost
c. FIFO