AnswerQuiz - Module 7

Agricultural activity is
a. The management by an entity of the biological transformation and harvest of biological assets
for sale or for conversion into agricultural produce, or into additional biological assets.
b. The processes of growth, degeneration, production and procreation that cause qualitative or
quantitative changes in a biological asset
c. The detachment of produce from a biological asset or cessation of a biological asset’s life
processes.
d. The original and planned investigation undertaken with the prospect of gaining new scientific or
technical knowledge and understanding.
Which of the following is an agricultural activity?

Ocean fishing
Deforestation
Forestry
All of the above
Biological asset is
A living animal or plant
A harvested produce from a living animal or plant
An identifiable non-monetary asset without physical substance
Tangible item that is held for use in the production or supply of goods or services for rental to others, or
for administrative purposes; and is expected to be used during more than one period
Bearer plant is a living plant that

Is used in the production or supply of agricultural produce
Is expected to bear produce for more than one period
Has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales
All of the above
The following pertains to the biological assets owned by ABC Farms, Inc.:
Carrying amount at January 1 459,570
Purchases 26,250
Gain arising from changes in fair value less costs to sell attributable to physical 15,350
changes
Gain arising from changes in fair value less costs to sell attributable to price 24,580
changes
Sales 100,700
The carrying amount if the biological assets on December 31 is
425,050
499,500
525,750
451,300
The following pertains to the biological assets owned by Night Company

Carrying Amount, January 1 800,000
Carrying Amount, December 31 1,080,000
Purchases 230,000
Sales 110,000
The amount to be recognized in the current period profit or loss related to these biological assets is
280,000
390,000
50,000
160,000
An entity cultivates cattle for the fresh meat industry. It slaughters its cattle and butchers the meat into
cuts before selling them to its meat wholesaler customers. The entity’s statement of financial position at
December 31, 2017 reported cattle at their fair value less costs to sell of P1,000,000.
At December 31, 2018, when the fair value less costs to sell of the entity’s herd is P1,500,000, the entity
slaughtered 40 percent of its herd (10 cattle) incurring slaughter costs of P5,000. The quoted price of a
carcass is P70,000 and the costs to sell are estimated at P200 per carcass.
On December 31, 2018, the entity also incurs P30,000 direct costs in processing the carcasses into meat
cuts ready for sale to its customers.
The net amount to be recognized in 2018 profit is

1,198,000
1,193,000
583,000
563,000
At the end of the reporting period, a tomato grower’s vines are six months old and bearing fully
developed ripe tomatoes. The accumulated cost of the fruit-bearing vines is P12,500 and their fair value
is P100,000. It is expected to cost the entity P5,000 to sell the tomato crop at the market. Once the
tomatoes have been harvested, the then-worthless vines will be abandoned. At the end of the reporting
period
The entity measures the tomatoes at P82,500, the tomato vines at P12,500 and recognizes a gain of
P82,500 for the increase in fair value
The entity measures the tomato-bearing vines at P95,000 and recognizes a gain of P87,500 increase in
fair value
The entity measures the tomato-bearing vines at P100,000 and recognizes a gain of P87,500 increase in
fair value
The entity measures the tomatoes at P95,000, the tomato vines at P0 and recognizes a gain of P82,500
for the increase in fair value
At the end of the reporting period, December 31, 2017, a tomato grower’s vines are bearing developed
ripe tomatoes. On December 31, 2017, the FVLCD of the vines with the soon to be harvested tomatoes
attached is measured at P24,000. The initial cost of the vines was P5,500 and the cost of growing them
during 2017 (planting, irrigation and fertilization) was P7,250.
The entity harvested its tomatoes on January 3, 2018. The cost of harvesting the tomatoes is P1,000. The
quoted price per kilogram of tomatoes is P50 and costs to sell are estimated at 1 percent of quoted
price. The entity harvests 500 kilograms if tomatoes. The life of a tomato vine is about 6 months. After
harvest, the vine has come to the end of its life and its fair value is negligible.
The fair value of the adjustment gain to be recognized in 2017 profit or loss is
a. 18,500
b. 11,250
c. 10,250
d. Nil
The fair value adjustment gain on initial recognition of agricultural produce to be recognized in 2018
profit or loss is
24,750
23,750
750
Nil

AnswerQuiz - Module 7

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Agricultural activity is

Which of the following is an agricultural activity?

Bearer plant is a living plant that

The following pertains to the biological assets owned by Night Company

The net amount to be recognized in 2018 profit is

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