GROUP NAMES;

PAMALANDONG
BIOLOGICAL DALANDANGAN
QUINO
ASSETS PESANA
BISCONDE
SUNIEGA
MULTIPLE CHOICE MOYET
QUESTIONS & PROBLEM KATADA
SOLVING QUESTIONS
MULTIPLE CHOICE
1. Which of the following is unlikely to be used in fair value measurement of
biological asset?
a. Quoted market price
b. The most recent market transaction price
c. The present value of the expected net cash flows
d. External independent valuation
MULTIPLE CHOICE
2. Which of the following would be classified as a product that is the result of
processing after harvest?
a. Cotton
b. Wool
c. Clothes
d. Cheese
MULTIPLE CHOICE
3. Which statement is true regarding agricultural produce?
a. In all cases, an entity shall measure agricultural produce at fair value less cost
of disposal at the point of harvest.
b. The prevailing view is that the fair value of agricultural produce at the point of
harvest can always be measured reliably.
c. The fair value measurement of agricultural produce stops at the time of
harvest.
d. All of these statements are true regarding agricultural produce.
MULTIPLE CHOICE
4. Where the fair value of the biological asset cannot be determined reliably, the
biological asset is measured at
a. Cost
b. Cost less accumulated depreciation
c. Cost less accumulated depreciation and accumulated impairment loss
d. Net realizable value
MULTIPLE CHOICE
5. Which of the following information shall be disclosed in relation to biological
asset and agricultural produce?
a. Separate disclosure of the gain or loss relating to biological asset and
agricultural produce.
b. The aggregate gain or loss arising on the initial recognition of biological asset
and agricultural produce and from the change in fair value less cost of disposal
of biological asset.
c. The total gain or loss from biological asset, agricultural produce, and from
changes in fair value less cost of disposal of biological asset.
d. There is no requirement in the standard to disclose separately any gain or loss.
MULTIPLE CHOICE
6. An entity had a plantation forest that is likely to be harvested and sold in 30
years. The income shall be accounted for in which of the following?
a. No income shall reported annually until first harvest and sale in 30 years.
b. Income shall be measured annually and reported using a fair value approach
that recognizes and measures biological growth.
c. The eventual sale proceeds shall be estimated and recognized over the 30-year
period.
d. The plantation forest shall be valued every 5 years and the increase in value
shall be recognized as component of other comprehensive income.
MULTIPLE CHOICE
7. Generally speaking, biological assets relating to agricultural activity shall be
measured using
a. Historical cost
b. Historical cost less depreciation less impairment
c. A fair value approach
d. Net realizable value
MULTIPLE CHOICE
8. A gain or loss arising on the initial recognition of a biological asset and from a
change in the fair value less cost of disposal of a biological asset shall be included in
a. The profit or loss for the period
b. Other comprehensive income
c. A revaluation reserve
d. Retained earnings
MULTIPLE CHOICE
9. The harvested agricultural produce is
a. Accounted for as inventory
b. Initially recognized at fair value less cost of disposal at the point of harvest
c. Recorded as gain from change in fair value
d. All of these are correct about harvested agricultural produce
MULTIPLE CHOICE
10. Animals related to recreational activities are classified as
a. Biological asset
b. Property, plant and equipment
c. Investment property
d. intangible asset
PROBLEM SOLVING
Bhaghong Company purchased Dairy cattle at an auction for 300,000 on
July 1, 2015. Cost of transporting the cattle back to the company’s farm
was 3,000 and the company would have to incur cost similar
transportation cost, in addition an auctioneer’s fee of 2% of sales price. On
December 31, 2015, after taking into account and location, the fair value
of the biological asset had increased to 500,000.

1. What amount should the biological assets be initially recognized?

PROBLEM SOLVING
On December 31, 2014, Brightable Company reported the following information involving its
biological assets:

Biological assets, at cost on December 31, 2020 6,000,000

Fair value surplus 7,000,000

Change in fair value to December 31, 2020 1,000,000

Decrease in fair value due to harvest 2020 900,000

2. What amount should the biological asset be reported in the December 31,
2020 balance sheet?

3. What amount of net gain should Sony Company report in its December 31,
2020 income statement?
PROBLEM SOLVING

At the beginning of the year, ThickTock Company had a herd of 10, 2-years
old animals.
One animal aged 2.5 years was purchase on July 1 for P108, and one
animal was born on July 1.
No animals were sold or disposed of during the year.
PROBLEM SOLVING
Fair value cost of disposal per unit

2 years old animal on January 1 100

2.5 years old animal on July 1 108

Newborn animal on July 1 70

2 years old animal Dec. 31 105

2.5 years old animal on Dec. 31 111

Newborn animal on Dec. 31 72

3 years old animal Dec. 31 120

0.5 years old animal on Dec. 31 80

4. What is the fair value of the biological asset on Dec. 31?

5. What amount of gain from change in fair value of biological assets should be recognized in the current year?

6. What is the gain from change in fair value due to price change?
PROBLEM SOLVING
Bhohang Company produced milk for sale to local and national ice cream
producers. The entity began operations at the beginning of current year by
purchasing 650 milk cows for P8,000,000.
The entity provided the following information for the current year:
Acquisition cost, January 1 8,000,000
Change in fair value due to growth and price changes 4,000,000
Decrease in fair value due to harvest 550,000
Milk harvested during the year but not yet sold 400,000

7. What amount of gain on change in fair value should be recognized for

biological asset in the current year?
8. What amount of gain on change in fair value should be reported for
agricultural produce in the current year?
PROBLEM SOLVING
Bogota Company is a producer of coffee. The entity is considering the valuation of harvested
coffee beans.
Industry practice is to value the coffee beans at market value and uses as reference a local
publication “Accounting for Successful Farms.”
On December 31, 2019, the entity has harvested coffee beans costing P3,000,000 and with
fair value less cost of disposal of P3,500,000 at the point harvest.
Because of long aging and maturation process after the harvest, the harvested coffee beans
were still on hand on December 31, 2020.
On December 31, 2020, the fair value less cost of disposal is P3,900,000 and the net
realizable value is P3,200,000.

9. What is the measurement of the coffee beans inventory on December 31,

2020?
PROBLEM SOLVING
Dora Company is engaged in raising livestock. The entity provided the following information
during the current year:

Carrying amount on January 1 6,000,000

Increase due to purchase 2,300,000
Gain arising from change in fair value less cost of disposal
attributable to price change 400,000
Gain arising from change in fair value less cost of disposal
attributable to physical change 500,000
Decrease due to sales 900,000
Decrease due to harvest 300,000

10. What is the carrying amount of the biological asset on December 31?