INTERMEDIATE ACCOUNTING 1
ASSIGNMENT NO. 4
1. FARRAH Company on adoption of PAS 41 has reclassified certain assets as biological assets. The total
value of the forest assets is P6,OOO,000 which comprises:
Freestanding trees
5,100,000
Land under trees
600,000
Roads in forests
_ 300,000
6,000,000
In FARRAH Company’s statement of financial portion, how much of the forest assets shall be classified as
biological assets?
2. COLD Company is a producer of coffee. The entity is considering the valuation of its harvested coffee
beans. Industry practice is to value the coffee beans at market value and uses as reference a local
publication “Accounting for Successful Farms”.
On December 31, 2018, the entity has harvested coffee beans costing P3,000,000 and with fair value less
cost to sell of P3,500,000 at the point harvest.
Because of long aging and maturation process after harvest, the harvested coffee beans were still on hand
on December 31,2018. On such date, the fair value less cost to sell is P3,900,000 and the net realizable
value is P3,200,000.
The coffee beans inventory shall be measured at
Use the following information for the next two questions.
JAN Company provided the following data:
Value of biological asset at acquisition cost on December 31,2017
P
fluctuation
Decrease in fair value due to harvest
1.5 – year old animal on July 1
New born animal on July 1
2.5 – year old animal on December 31
Newborn animal on December 31
0.5 – year old animal on December 31
