Chapter – Biological Assets CHAPTER 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 price fluctuations 2,000,000 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 Increase in FV less POS Costs P 150,000 P2,000,000 9.2 (Ranchero Corporation) (a) Balance of Biological Assets at December 31, 2008 years old = 2,000 x P44,000 P88,000,000 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 : year old cows 2,000 x (P47,000 – P44,000) year old heifers 1,500 x (P37,500 – P35,000) Increase in FV due to Price Change P6,000,000 3,750,000 P9,750,000 (2) Physical Change year old cows 2,000 x (P55,000 – P47,000) year old cows 1,500 x (47,000 – P37,500) Increase in FV due to Physical Change (c) FV less POS Costs at December 31, 2009 year old cows 2,000 x P55,000 year old cows 1,500 x P47,000 FV less POS costs at December 31, 2009 P16,000,000 14,250,000 30,250,000 P110,000,000 70,500,000 P180,500,000 (d) Entry at yearend Biological Assets 40,000,000 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 (a) Price Change year-old animals on Jan 10 x (P10,500 – P10,000) 2.5 year-old animal on July 1 x (P11,100 – P10,800) Animal born on July 1 x (P7,200 – P7,000) Change in FV less POS Cost due to Price Change 9-3 65 P5,000 300 200 P5,500 Chapter – Biological Assets Physical Change year-old animals on 12/31 10 x (P12,000 – P10,500) P15,000 year old animal on 12/31 x (P12,000 – P11,100) Born on July (upon birth) On December 31 P8,000 – P7,200 Change in FV less POS Cost due to Physical Change P23,700 (b) Entries for the Year 2009 July Biological Assets Cash Purchased one animal 10,800 900 7,000 800 10,800 Biological Assets 7,000 Increase in FV less POS Cost due to Physical Change 7,000 Dec 31 Biological Assets 22,200 Increase in FV less POS Cost due to Price Change 5,500 Increase in FV less POS Cost due to Physical Change (23,700 – 7,000) 31 Cash {2 x (13,500 – 1,500) Biological Assets (c) 24,000 Balance, 1/1/09 10 animals x P10,000 P100,000 Purchase Change in FV less POS Cost due to Price Change 5,500 (24,000) Change in FV less POS Cost due to Physical Change (including the birth of one animal) Sale at FV less POS cost 16,700 24,000 10,800 23,700 Balance, December 31, 2009 P116,000 (d) The balance at December 31, 2009 is composed of the following: year old animals animals x P12,000 year old animal animal x P8,000 8,000 Total MULTIPLE CHOICE MC1 MC2 MC3 B D C MC4 D MC5 D MC8 MC9 MC1 MC1 MC1 66 B A B B B P108,000 P116,000 Chapter – Biological Assets MC6 B MC7 B MC15 MC16 MC17 C C C MC18 MC19 MC20 A D B MC1 A MC1 C 450,000 + 250,000 + 220,000 + 64,000 – 290,000 = 694,000 220,000 + 64,000 = 284,000 {(15,000-13,000) x 25} +{ (7,000-5,000) x } + (4,000 x 5) = 80,000 {13,000 – 12,000) 25 + (5,000 – 4,000) x = 30,000 (25 x 15,000) + (5 x 7,000) = 410,000 30,000 + 80,000 67 ... MC9 MC1 MC1 MC1 66 B A B B B P108,000 P116,000 Chapter – Biological Assets MC6 B MC7 B MC15 MC16 MC17 C C C MC18 MC 19 MC20 A D B MC1 A MC1 C 450,000 + 250,000 + 220,000 + 64,000 – 290 ,000 = 694 ,000... at FV less POS cost 16,700 24,000 10,800 23,700 Balance, December 31, 20 09 P116,000 (d) The balance at December 31, 20 09 is composed of the following: year old animals animals x P12,000 year old... POS Cost due to Physical Change P23,700 (b) Entries for the Year 20 09 July Biological Assets Cash Purchased one animal 10,800 90 0 7,000 800 10,800 Biological Assets 7,000 Increase in FV less POS