Problem 35-1 (IFRS)

ABC Company provided the following assets in a forest

plantation:
Freestanding trees 25,500,000
Land under trees 3,000,000
Roads in forests 1,500,000
Animals related to recreational activities 5,000,000
Bearer plants- rubber trees and grape vines 7,500,000
What total amount of the assets should be classified as
biological assets?
a. 25,500,000
b. 38,000,000
c. 33,000,000
d. 42,500,000

Problem 35-2 (IFRS)

ABC Company is a producer of coffee. The entity is considering
the valuation of harvested coffee beans at market value and uses
as reference a local publication Accounting for Successful
Farms.
On December 31, 2015, the entity has harvested coffee beans
costing P15,000,000 and with fair value less cost of disposal
of P17,500,000 at the point of harvest.
Because of long aging and maturation process after harvest, the
harvested coffee beans were still on hand on December 31, 2016.
On such date, the fair value less cost of disposal is P19,500,000
and the net realizable is P16,000,000.
What is the measurement of the coffee beans inventory on
December 31, 2016?
a. 15,000,000
b. 17,500,000
c. 16,000,000
d. 19,500,000

Problem 35-3 (IFRS)

ABC Company provided the following data:
Value of biological asset at acquisition on
December 31, 2015 3,000,000
Fair valuation surplus on initial recognition
at fair value on December 31, 2015 3,500,000
Change in fair value on December 31, 2016
due to growth and price fluctuation 500,000
Decrease in fair value due to harvest in 2016 450,000

1. What is the carrying amount of the biological asset on

December 31, 2016?
a. 7,000,000
b. 6,550,000
c. 6,500,000
d. 7,450,000
2. What is the gain from change in fair value of biological asset
that should be reported in the 2016 income statement?
a. 500,000
b. 4,000,000
c. 3,550,000
d. 50,000

Problem 35-4 (IFRS)

ABC Company is engaged in raising dairy livestock. The entity
provided the following information during the current year:
Carrying amount on January 1 25,000,000
Increase due to purchases 10,000,000
Gain arising from change in fair value
less cost of disposal attributable
to price change 2,000,000
Gain arising from change in fair value
less cost of disposal attributable
to physical change 3,000,000
Decrease due to sales 4,250,000
Decrease due to harvest 1,000,000
What is the carrying amount of the biological asset on December
31?
a. 34,750,000
b. 30,000,000
c. 40,000,000
d. 35,750,000

Problem 35-5 (IAA)

ABC Company produced milk for sale to local and national ice
cream producers. The entity began operations at the beginning
of the current year by purchasing 650 milk cows for P40,000,000.
The entity provided the following information for the current
year:

Acquisition cost, January 1 40,000,000

Change in fair value due to growth and
price changes 12,500,000
Decrease in fair value due to harvest 1,250,000
Milk harvested during the year but not
yet sold 2,000,000

1. What amount of gain in change on fair value should be

recognized for biological asset in the current year?
a. 12,500,000
b. 11,250,000
c. 14,500,000
d. 13,250,000
2. What amount of gain on change in fair value should be reported
for agricultural produce in the current year?
a. 11,250,000
b. 2,000,000
c. 750,000
d. 0

Problem 35-6 (IFRS)

ABC Company has a herd of 10 2-year old animals on January 1,
2016. One animal aged 2.5 years was purchased on July 1, 2016
for 540, and one animal was born on July 1, 2016. No animals
were sold or disposed of during the year. The fair value les
cost of disposal per unit is as follows:
2-year old animal on January 1 500
2.5-year old animal on July 1 540
New born animal on July 1 350
2-year old animal on December 31 525
2.5-year old animal on December 31 555
Newborn animal on December 31 360
3-year old animal on December 31 600
0.5-year old animal on December 31 400

1. What is the fair value of the biological assets on December

31?
a. 7,000,000
b. 6,600,000
c. 7,200,000
d. 6,800,000
2. What amount of gain from change in fair value of biological
assets should be recognized in the current year?
a. 1110
b. 1,460
c. 1,500
d. 1,660
3. What is the gain from change in fair value due to price
change?
a. 1,460
b. 1110
c. 1185
d. 275

Problem 35-7 (IFRS)

ABC Company produces milk on its farms. The entity produces 20%
of the communitys milk that is consumed. Farmland Company owns
5 farms and had a stock of 2,100 cows and 1,050 heifers.
The farms produce 800,000 kilograms of milk a year and the
average inventory held is 15,000 kilograms of milk.
However, on December 31,2016 the entity is currently holding
50,000 kilograms of milk in powder.
On December 31, 2016, the biological assets are:
Purchased before January 1, 2016 (3 years old) 2,100 cows
Purchased before January 1, 2016 (2 years old) 300 heifers
Purchased on July 1, 2016 (1.5 years old) 750 heifers
No animals were born or sold during the current year. The unit
fair value less cost of disposal is as follows.
January 1, 2016:
1-year old 15,000
2-year old 20,000
July 1, 2016
1-year old 15,000
December 31, 2016:
1-year old 16,000
2-year old 22,500
1.5-year old 18,000
3-year old 25,000
The entity has had problems during the year. Contaminated milk
was sold to customers. As a result, milk consumption has gone
down.
The entitys business is spread over different parts of the
country. The only region affected by contamination was Batangas.
However, the cattle in this area were unaffected by the
contamination and were healthy.
There are 600 cows and 200 heifers in the Batangas farm and all
these animals had been purchased on January 1, 2016.
1. What is the fair value of biological assets in January 1,
2016?
a. 46,500,000
b. 48,000,000
c. 42,000,000
d. 36,000,000
2. What is the fair value of biological assets purchased on July
1, 2016?
a. 11,250,000
b. 15,000,000
c. 18,750,000
d. 16,875,000
3. What is the fair value of biological assets on December 31,
2016?
a. 72,750,000
b. 78,750,000
c. 76,125,000
d. 59,250,000
4. What is the increase in fair value of biological assets on
December 31, 2016?
a. 15,000,000
b. 26,250,000
c. 24,750,000
d. 30,150,000
5. What is the increase in fair value of biological assets due
to physical change?
a. 6,300,000
b. 8,700,000
c. 15,000,000
d. 7,200,000

Problem 35-8 (IFRS)

ABC Company provided the following information for the year
ended December 31, 2016:
Cash 2,500,000
Trade and other receivables 7,500,000
Inventories 500,000
Dairy livestock- immature 250,000
Dairy livestock- mature 2,000,000
Property, plant and equipment, net 7,000,000
Trade and other payables 2,600,000
Note payable- long-term 7,500,000
Share capital 5,000,000
Retained earnings- January 1 4,000,000
Fair value of milk produced 3,000,000
Gain from change in fair value 250,000
Inventories used 700,000
Staff costs 600,000
Depreciation expense 75,000
Other operating expenses 950,000
Income tax expense 220,000

1. What is the net income for 2016?

a. 3,250,000
b. 3,000,000
c. 650,000
d. 925,000
2. What is the fair value of biological assets on December 31,
2015?
a. 2,750,000
b. 2,250,000
c. 2,500,000
d. 2,000,000