Biological Assets 

Problem 1 
The following pertains to Bu Company, a company operating in a diverse agricultural activity. 
Sheep  P400,000

Felled trees  2,680,000

Harvested cane  1,160,000

Coconut trees  4,800,000

Dairy cattle  4,000,000

Cigarette  41,000

Sausages  20,000

Cured hams  36,000

Pig carcass  230,000

Fruit pickles  120,000

Trees in plantation forest  12,000,000

Harvested cabbage  40,000

Carpet  260,000

Grape vines  1,500,000

Picked grape fruit  180,000

Wool  160,000

Tea  38,200

Cotton  1,360,000

Plants  1,400,000

Thread  80,000

Carrots due to be harvested next week  200,000

Low fat milk  520,000

Wine  6,000,000

Picked fruit  49,400

Frozen lechon  120,000

Mango trees with ripe mango not yet harvested  1,400,000

Guard dogs  300,000

Animals in zoo (e.g., tigers, zebra, python, etc.)  24,000,000

 Dinosaur statue in zoo  1,000,000

Ripe tomato ready for harvest  500,000

Strawberry plants  1,500,000

Compute the amount classified as either: 

a. Biological assets 
b. Agricultural produce 
c. Inventory 
d. Property, plant and equipment 
Solution:
Sheep  P400,000  Biological asset

Felled trees  2,680,000  Agricultural Produce

Harvested cane  1,160,000  Agricultural Produce

Coconut trees  4,800,000  PPE

Dairy cattle  4,000,000  Biological Asset

Cigarette  41,000  Inventory

Sausages  20,000  Inventory

Cured hams  36,000  Inventory

Pig carcass  230,000  Agricultural Produce

Fruit pickles  120,000  Inventory

Trees in plantation forest  12,000,000  Biological Asset

Harvested cabbage  40,000  Agricultural Produce

Carpet  260,000  Inventory

Grape vines  1,500,000  PPE

Picked grape fruit  180,000  Agricultural Produce

Wool  160,000  Agricultural Produce

Tea  38,200  Inventory

Cotton  1,360,000  Agricultural Produce

Plants  1,400,000  Biological Asset

Thread  80,000  Inventory

Carrots due to be harvested next week  200,000  Biological Asset

Low fat milk  520,000  Inventory

Wine  6,000,000  Inventory

Picked fruit  49,400  Agricultural Produce

Frozen lechon  120,000  Inventory

Mango trees with ripe mango not yet harvested  1,400,000  PPE

Guard dogs  300,000  PPE

Animals in zoo (e.g., tigers, zebra, python, etc.)  24,000,000  PPE

Dinosaur statue in zoo  1,000,000  PPE

Ripe tomato ready for harvest  500,000  Biological Asset

Strawberry plants  1,500,000  PPE

Sheep  P400,000

Dairy cattle  4,000,000

Trees in plantation forest  12,000,000

Plants  1,400,000

Carrots due to be harvested next week  200,000

Ripe tomato ready for harvest  500,000

Total Biological Assets  P18,500,000

Felled trees  P2,680,000

Harvested cane  1,160,000

Pig carcass  230,000

Harvested cabbage  40,000

Picked grape fruit  180,000

Wool  160,000

Cotton  1,360,000

Picked fruit  49,400

Total agricultural produce  P5,859,400

Cigarette  P41,000

Sausages  20,000

Cured hams  36,000

Fruit pickles  120,000

 Carpet  260,000

Tea  38,200

Thread  80,000

Low fat milk  520,000

Wine  6,000,000

Frozen lechon  120,000

Total inventory  P7,235,200

Coconut trees  P4,800,000

Grape vines  1,500,000

Mango tree with ripe mangos not yet harvested  1,400,000

Guard dogs  300,000

Animals in zoo (e.g., tigers, zebra, python, etc.)  24,000,000

Dinosaur statue in zoo  1,000,000

Strawberry plants  1,500,000

Total Property, plant and equipment  P34,500,000

Problem 2 
A herd of 10 2-year old animals was held at January 1, 2018. One animal aged 2 ½ years was  purchased on July 1,
2018 for P1,080, and one animal was born on July 1, 2018. No animals  were sold or disposed of during the period.
Per unit fair value less cost to sell were as follows: 
January 1, 2018  July 1, 2018  December 31, 2018

New born animal  P700  P720

½ year old animal  800

2-year old animal  P1,000  1,050

2 ½ year old animal  1,080  1,110

3 year old animal  1,200

Determine: 
a. Increase in fair value less cost to sell due to price change 
b. Increase in fair value less cost to sell due to physical change 
c. Fair value less cost to sell of herd on December 31, 2018 
Solution: 
Price change = (P1 – P0) (Q0) 
Physical change = (P1(age1) – P1 (age0)) (Q1)
½ year old animal (New born animal on July 1)  (720-700) x 1  20

3 year old animal (2 year old from Jan 1)  (1,050-1000) x 10  500
3 year old animal (2 ½ years old from July 1)  (1,110 – 1080) x 1  30

Total gain due to price change  P550

½ year old animal (New born animal on July 1)  (800-720) x 1  80

3 year old animal (2 year old from Jan 1)  (1200-1050) x 10  1,500

3 year old animal (2 ½ years old from July 1)  (1200-1110) x 1  90

Gain on initial recognition (newborn on July 1)  (700 x 1)  700

Total gain due to physical change  P2,370

3 year old animal  1,200 x 11  P13,200

1.2 year old animal  800 x 1  800

Carrying amount of biological asset 12/31/2018  P14,000