Problem 12-8

Answer: A

Forest Asset 6,000,000.00

Less: Land Under Trees 600,000.00
Roads in Forest 300,000.00
Free Standing Trees 5,100,000.00
Problem 12-10
Carrying amount of llamas, January 1, 2013 5,000,000 5,000,000
Change in fair value due to growth and price change 350,000 300,000
Decrease in fair value due to harvest 50,000 5,300,000
Wool harvested during the year but not sold 100,000
Total Biological Assets:
Journal Entries: a. 5,300,000
Biological Assets 5,000,000
Cash 5,000,000

Biological Assets 300,000

Gain from change in fair value 300,000

Wool Inventory 50,000

Gain from change in fair value 50,000

Change in fair value Php 350,000.00

Decrease in fair value due to harvest Php (50,000.00)
Php 300,000.00
Problem 12-9
1. Answer: A

2. Answer: B

Fair value - 12/31/2011 (same age) 2,800,000.00

Carrying amount (2.1M + 250,000) 2,350,000.00
Price change 450,000.00

3. Answer: C
Fair value - 12/31/2011 (different age) 3,160,000.00
Fair value - 12/31/2011 (same age) 2,800,000.00
Physical change 360,000.00
Problem 12-12
1.) Acquisition cost - Dec. 31, 2014 6,000,000
Increase in fair value on initial recognition 500,000
Change in fair value in 2014 900,000
Decrease in fair value due to harvest (100,000)
Carrying amount - Dec. 31, 2014 7,300,000 (B)

2.) Change in fair value in 2014 900,000

Decrease in fair value due to harvest (100,000)
Net gain 800,000 (D)
Problem 12-13
1. Biological asset 350,000.00
Gain from change in fair value 350,000.00

Change in fair value due to growth and price change 400,000.00

Decrease in fair value due to harvest (50,000.00)
ANSWER: B 350,000.00

2. Milking Inventory 150,000.00

Gain from change in fair value 150,000.00
ANSWER: A
Problem 12-14
Answer: C

Fair value measurement stops at the point of harvest and PAS 2 applies after such date.

Accordingly, the coffee beans inventory shall be measured at the lower of cost and net realizable value on Dec. 31, 2012.

For purposes of applying PAS 2, the fair value less cost to sell to P3.5M at the point of harvest is the initial cost of coffee beans
The net realizable value of P3.2M is the measurement on Dec. 31, 2014 because this is the lower than the deemed cost of P3.5

Accordingly, loss on inventory writedown of P300,000 should be recognized in 2014.