Biological assets
1. Biological assets:
a. Are found only in land
b. Are measured only at cost
c. Are living animals or living plants and must be disclosed as a separate line item in statement
of financial position.
d. Are ornamental and do not have an economic benefit
2. Agricultural activity includes all, except
a. Ocean fishing
b. Aquaculture
c. Raising live stock
d. Perennial cropping
3. Agricultural produce harvested from bearer plant is measure at
a. Fair value
b. Fair value less cost of disposal at the point of harvest
c. Cost
d. Fair value plus cost of disposal at the point of harvest
4. Which of the following criteria must not be satisfied before a biological asset can be recognized?
a. The entity controls the asset as a result of past event.
b. It is probable that future economic benefits relating to the assets will flow to the entity.
c. The fair value can be measured reliably.
d. An active market for the asset exists.
5. Statement I: In all cases, an entity do not measure agricultural produce at fair value less cost of
disposal at the point of harvest.
Statement II: Bearer plants are considered as noncurrent assets
a. Statement I is false
b. Statement II is false
c. Both statements are true
d. Both statements are false
6. Alex and Ria corp. provided the fillowing assets in a forest plantation and farm:
Free standing plants
16,050,000
Land under trees
500,000
Roads in the Forest
500,000
Animals related to recreational activities
1,000,000
Bearer plants
3,000,000
Bearer animals
1,500,000
Agricultural produce growing on bearer plants
Agricultural produce harvested
Plants with dual use
What amount should be recorded as biological assets?
a. 19,750,000
b. 10,200,000
c. 18,050,000
d. 22,950,000
800,000
1,000,000
1,400,00
7. You do note company is engaged in raising dairy livestock. The entity provided the following
information regarding activities relating to the dairy livestock during the current year:
Carrying amount on January 1
6,000,000
Increase due to purchases
3,000,000
Gain arising from change in fair value less cost of
disposal attributable to price change
500,000
Gain arising from change in fair value less cost of
disposal attributable to physical change
700,000
Decrease due to sales
950,000
Decrease due to harvest
200,000
What is the carrying amount of the biological asset on December 31?
a. 9,250,000
b. 9,050,000
c. 6,050,000
d. 7,000,000
8. Hopey Company has different kinds of farm animals at the beginning of current year.
During the current year, several acquisitions occurred related to these farm animals.
Carrying amount on January 1:
15 Horses
(1 year old)
1,000,000
10 Diary cattle (2 year old)
400,000
8 Carabaos
(2.5 years old)
200,000
20 Hogs
(3 years old)
500,000
Purchases on June 30.
4 Dairy cattle (1 year old)
150,000
6 Carabaos
(6 months old)
100,000
Fair value less cost of disposal on December 31:
15 Horses
(1 year old)
1,200,000
10 Diary cattle (2 years old)
8 Carabaos
(2.5 years old)
20 Hogs
(3 years old)
4 Diary cattle (1 year old)
6 Carabaos
(6 months old)
Fair value less cost of disposal on December 31:
15 Horses
(2 year old)
10 Diary cattle (3 years old)
8 Carabaos
(3.5 years old)
20 Hogs
(4 years old)
4 Diary cattle (1.5 year old)
6 Carabaos
(1 year old)
520,000
250,000
550,000
170,000
110,000
1,350,000
580,000
290,000
600,000
200,000
140,000
There were no farm animals sold during the year and neither were there any newborns nor deaths.
. What is the gain from change in fair value attributable to price change?
a. 450,000
b. 810,000
c. 360,000
d. 0
9. in relation to no. 8, What is the gain from change in fair value attributable to physical change?
a. 450,000
b. 810,000
c. 360,000
d. 0
10. Pasar lagi ta ani company planted trees on its land. The entity purchased the land two years ago at
cost of Php 1,000,000.
The trees were considered bearer plants and had accumulated cost of Php 500,000 on December
31,2016.
By January 1, 2017; the trees had matured and were expected to bear produce for a period of 5 years.
On December 31, 2017, the trees produced fruit and the fair value less cost of disposal on such date was
Php 50,000. There was no harvest during 2017.
On December 31, 2018, the fruits were harvested and the fair value less cost of disposal on such date
was Php 75,000.
What is the carrying amount of the biological asset on December 31, 201?
a. 550,000
b. 450,000
c. 50,000
d. 0
Answers:
1. C
2. A
3. B
4. D
5. a
6. 16,050,000
1,500,000
800,000
1,400,000
19,750,000
7.
.
Carrying amount – January 1
Increase due to purchases
Gain from change in fair value due to price change
Gain from change in fair value due to physical change
Decrease due to sales
Decrease due to harvest
Carrying amount –December 31
6,000,000
3,000,000
500,000
700,000
(950,000)
(200,000)
9,050,000
8.
Fair value – December 31 (same age)
Carrying amount (2,100,000+250,000)
Price Change
2,800,000
2,350.000
450,000
9.
Fair value – December 31 (different age)
Fair value – December 31 (Same age)
Physical Change
10. 50,000
3,160,000
2,800,000
360,000