Legend Dairy produced milk for local ice cream producers,The entity began operations at the beginning of current yearProblem 13-4 (IAA)Legend Dairy produced milk for local ice creamThe entity began operations at the beginning of current veby purchasing milking cows for P2,000,000.The entity provided the following information at year-enarelating to the milking cows:2,000,000Carrying amount-beginningChange in fair value due to growth and price changeDecrease in fair value due to harvestNewborn calf at year-end at fair valueMilk harvested during the year but not yet sold400,00050,000200,000250,0001. What amount of net gain on biological asset should bereported in the current year?a. 400,000b. 350,000c. 800,000d. 550,0002. What amount of gain on agricultural produce should bereported in the current year?a. 250,000b. 200,000c. 600,000d. 650,0003. What is the carrying amount of the biological asset atyear-end?a. 2,000,000b. 2,400,000e. 2,550,000d. 2,800,000

Assets can be either fixed or the non-current asset which depends upon the duration and life of the…

Answered: What amount of net gain on biological…

Business

Accounting

What amount of net gain on biological asset should be reported in the current year?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter16: Multistate Corporate Taxation

Section: Chapter Questions

Problem 21CE

See similar textbooks

Similar questions

PT Milkisu produced milk for sale to local and national cream producers. The entity began operations at a beginning of current year by purchasing 500 milk cows for CU8.000.000. The entity had the following information available at year-end relating to the cows:Carrying amount of milking cows, Jan 1 8.000.000Change in fair value due to growth and price change 900.000Decrease in fair value due to harvest 200.000Milk harvested during the year but not sold 400.000 Prepare journal entries to record the gain from change in fair value of agricultural produce
PT Milkisu produced milk for sale to local and national cream producers. The entity beganoperations at a beginning of current year by purchasing 500 milk cows for CU8.000.000.The entity had the following information available at year-end relating to the cows:Carrying amount of milking cows, Jan 1 8.000.000Change in fair value due to growth and price change 900.000Decrease in fair value due to harvest 200.000Milk harvested during the year but not sold 400.000Required: 1. Is the natural breeding of animals in zoos and game parks agricultural activity?2. Is ocean fishing agricultural activity?3. Is palm plantation agricultural activity? Describe the accounting treatment forbiological assets and agricultural products in oil palm plantations
PT Milkisu produced milk for sale to local and national cream producers. The entity beganoperations at a beginning of current year by purchasing 500 milk cows for CU8.000.000.The entity had the following information available at year-end relating to the cows:Carrying amount of milking cows, Jan 1 8.000.000Change in fair value due to growth and price change 900.000Decrease in fair value due to harvest 200.000Milk harvested during the year but not sold 400.000Required:Discuss and prepare journal entries:1. To record the acquisition of milking cows2. To record the net gain from the change in fair value of the milking cows3. To record the gain from change in fair value of agricultural produce
Salve Co is engaged in raising dairy livestock. The entity provided the following information during the current year: Carrying Amount - Beginning 5,000,000 Increase due to purchase 2,000,000 Gain arising from change in FV 1,000,000 Decrease due to sales 850,000 Decrease due to harvest 200,000 What is the carrying amount of the biological asset at year-end?
WeCareCows Company produces dairy products for sale to grocery stores and direct consumers. When they started their operations, they bought 650 milk cows for P8,000,000. The following information are provided during the year: • Acquisition cost, January 1- P8,000,000 • Change in fair value due to growth and price changes- P2,500,000 • Decrease in fair value due to harvest- P250,000 • Milk harvested during the year but not yet sold- P400,000 What amount of gain on change in fair value should be recognized for biological assets for the year? A. P2,650,000 B. P2,900,000 C. P2,500,000 D. P2,250,000
At the beginning of current year, an entity purchased 100 cows which are 3 years old for P15,000 each for the purpose of producing milk for the local community. On July 1, the cows gave birth to 20 calves. The active market, provided the fair value less costs to sell of the biological assets as follows: New born calf on July 1 - 4,000 New born calf on December 31 - 5,000 ½ year old calf on December 31 - 7,000 3 years old cow on December 31 - 18,000 4 years old cow on December 31 - 24,000 Required: Prepare the journal entries with supporting computation as applicable.
Part 1.PT Milkisu produced milk for sale to local and national cream producers. The entity began operations at a beginning of current year by purchasing 500 milk cows for CU8.000.000.The entity had the following information available at year-end relating to the cows:Carrying amount of milking cows, Jan 1 8.000.000Change in fair value due to growth and price change 900.000Decrease in fair value due to harvest 200.000Milk harvested during the year but not sold 400.000 Required:Discuss and prepare journal entries:1. To record the acquisition of milking cows2. To record the net gain from the change in fair value of the milking cows3. To record the gain from change in fair value of agricultural produce Part 2.Discuss and answer these questions:1. Is the natural breeding of animals in zoos and game parks agricultural activity?2. Is ocean fishing agricultural activity?3. Is palm plantation agricultural activity? Describe the accounting treatment for biological assets and agricultural…
On January 1, 20X2, Sansa Company purchases two (2) separate sets of assets and activities from thirdparties, as follows:i. A manufacturing plant of Arya Company. The set of assets acquired and liabilities assumed are as follows:Plant premise P100,000,000Machinery 60,000,000Equipment 30,000,000A mortgage loan secured on the plant premise 120,0000Sansa will continue to employ the existing employees of the manufacturing plant and will pay them thesame salaries as before. The above manufacturing plant is a cash-generating unit that generatesoutputs that are sold to outside customers. Sansa pays a cash consideration of P100 million to AryaCompany.ii. A set of assets and liabilities of Bron Company.Plant premise P100,000,000Machinery 60,000,000Equipment 30,000,000A mortgage loan secured on the plant premise 120,0000The vendor will retrench the existing employees of the factory and pay their termination benefits. The setof assets is not capable of generating independent cash flows. However,…
On January 1, 20X2, Sansa Company purchases two (2) separate sets of assets and activities from thirdparties, as follows:i. A manufacturing plant of Arya Company. The set of assets acquired and liabilities assumed are as follows:Plant premise P100,000,000Machinery 60,000,000Equipment 30,000,000A mortgage loan secured on the plant premise 120,0000Sansa will continue to employ the existing employees of the manufacturing plant and will pay them thesame salaries as before. The above manufacturing plant is a cash-generating unit that generatesoutputs that are sold to outside customers. Sansa pays a cash consideration of P100 million to AryaCompany.ii. A set of assets and liabilities of Bron Company.Plant premise P100,000,000Machinery 60,000,000Equipment 30,000,000A mortgage loan secured on the plant premise 120,0000The vendor will retrench the existing employees of the factory and pay their termination benefits. The setof assets is not capable of generating independent cash flows. However,…
Baker Company sold consumer products that are packaged in boxes. The entity offered an unbreakable glass in exchange for two box tops and P50 as a promotion during the current year. The cost of the glass was P200. The entity estimated at the end the year that it would be probable that 50% of the box tops will be redeemed. The entity sold 100,000 boxes of the product during the current year and 40,000 box tops were redeemed during the year. What amount should be reported as estimated liability at year-end?
On January 1, 20x1, an entity grants a franchisee the right to operate a restaurant in a specific market using the entity’s brand name, concept and menu for a period of ten years. The entity has granted others similar rights to operate this restaurant concept in other markets. The entity commonly conducts national advertising campaigns, promoting the brand name, and restaurant concept generally. The franchisee will also purchase kitchen equipment from the entity. The entity will receive ₱950,000 upfront (₱50,000 for the kitchen equipment and ₱900,000 for the franchise right) plus a royalty, paid quarterly, based on 4% of the franchisee’s sales over the life of the contract. The ₱50,000 amount reflects the stand-alone selling price of the kitchen equipment. The entity delivers the kitchen equipment to the customer on February 1, 20x1. The customer commences business operations on April 1, 20x1 and reports total sales of ₱5,000,000 for the year. How much total revenue should the entity…
On January 1, 20x1, an entity grants a franchisee the right to operate a restaurant in a specific market using the entity’s brand name, concept and menu for a period of ten years. The entity has granted others similar rights to operate this restaurant concept in other markets. The entity commonly conducts national advertising campaigns, promoting the brand name, and restaurant concept generally. The franchisee will also purchase kitchen equipment from the entity. The entity will receive ₱950,000 upfront (₱50,000 for the kitchen equipment and ₱900,000 for the franchise right) plus a royalty, paid quarterly, based on 4% of the franchisee’s sales over the life of the contract. The ₱50,000 amount reflects the stand-alone selling price of the kitchen equipment. The entity delivers the kitchen equipment to the customer on February 1, 20x1. The customer commences business operations on April 1, 20x1 and reports total sales of ₱5,000,000 for the year. How much total revenue should the entity…