The document provides examples of biological assets and their classification, measurement, and accounting treatment. It includes examples such as sheep, wool, cattle, milk, sugarcane, apple trees, and harvested apples. For each it asks to indicate the applicable accounting standard and measurement principle. It also provides several scenarios requiring journal entries to record initial recognition of biological assets and harvested biological products, and calculations related to fair value and a government grant for planting rice.
The document provides examples of biological assets and their classification, measurement, and accounting treatment. It includes examples such as sheep, wool, cattle, milk, sugarcane, apple trees, and harvested apples. For each it asks to indicate the applicable accounting standard and measurement principle. It also provides several scenarios requiring journal entries to record initial recognition of biological assets and harvested biological products, and calculations related to fair value and a government grant for planting rice.
The document provides examples of biological assets and their classification, measurement, and accounting treatment. It includes examples such as sheep, wool, cattle, milk, sugarcane, apple trees, and harvested apples. For each it asks to indicate the applicable accounting standard and measurement principle. It also provides several scenarios requiring journal entries to record initial recognition of biological assets and harvested biological products, and calculations related to fair value and a government grant for planting rice.
The document provides examples of biological assets and their classification, measurement, and accounting treatment. It includes examples such as sheep, wool, cattle, milk, sugarcane, apple trees, and harvested apples. For each it asks to indicate the applicable accounting standard and measurement principle. It also provides several scenarios requiring journal entries to record initial recognition of biological assets and harvested biological products, and calculations related to fair value and a government grant for planting rice.
g. Sugarcane _______________ ___________ ___________
h. Harvested cane _______________ ___________ ___________
i. Sugar _______________ ___________ ___________
j. Apple trees _______________ ___________ ___________
k. Harvested apples _______________ ___________ ___________
l. Apple juice _______________ ___________ ___________
Requirement: Classify the above items accordingly and indicate the applicable accounting standard and measurement principle. 2. On January 1, 2025, Pinnacle Company reported the following information:
Price in the principal market P20,000
Commissions to brokers 1,000 Transport costs 700 Levies by commodity exchange 300 Transfer taxes and duties 500 Advertising costs 200
Requirement: Compute for the following:
1. Fair value 2. Cost to sell 3. Fair value less cost to sell
3. On January 1, 2025, Mr. Accounting Company acquired a biological asset at its fair value of P10,000. Necessary costs incurred on the purchased totaled P2,000. It was estimated that if the biological asset is to be sold currently, costs to sell would amount to P500.
Requirement: Provide the journal entry to record the initial recognition.
4. On January 1, 2025, a dairy cattle of CPA Company gave birth to a calf. The fair value less cost to sell of a newly born calf as of January 1, 2025 is P5,000. Costs incurred to induce procreation such as costs of artificial insemination, costs of labor totaled P3,000.
Requirement: Provide the journal entry to record the initial recognition.
5. On April 1, 2025, BSA Company harvested ripe mangoes. The harvested mangoes have fair value less cost to sell of P50,000 on April 1, 2025. Labor costs incurred in the harvest totaled P5,000.
Requirement: Provide the journal entry to record the initial recognition.
6. [Government grant related to biological asset] On January 1, 2025, the government granted Pinnacle Company P500,000 cash aid in planting rice. Rice plants are considered “annual crops” and therefore do not qualify as bearer plants. The grant requires Pinnacle to farm only within the city limits for five years. If any of the conditions is breached, Pinnacle must return the grant taking into consideration the portion retained based on passage of time.
Requirement: Compute for the following:
1. Income from government grant in 2025 assuming no breach of condition. 2. Total income from government grant earned over five years assuming no breach of condition.
