1. Which of the following is not dealt with by PAS 41?

a. The accounting for biological assets.

b. The initial measurement of agricultural produce harvested from the entity’s biological assets.
c. The processing of agricultural produce after harvest.
d. The accounting treatment of government grants received in respect of biological assets.

2. Where there is a long aging or maturation process after harvest, the accounting for such
products should be dealt with by
a. PAS 41.
b. PAS 2, Inventories.
c. PAS 16, Property, Plant, and Equipment.
d. PAS 40, Investment Property.

3. Generally speaking, biological assets relating to agricultural activity should be measured using
a. Historical cost.
b. Historical cost less depreciation less impairment.
c. A fair value approach.
d. Net realizable value.

4. Entity A had a plantation forest that is likely to be harvested and sold in 30 years. The income
should be accounted for in the following way:
a. No income should be reported until first harvest and sale in 30 years.
b. Income should be measured annually and reported using a fair value approach that
recognizes and measures biological growth.
c. The eventual sale proceeds should be estimated and matched to the profit and loss account
over the 30-year period.
d. The plantation forest should be valued every 5 years and the increase in value should be
shown in the statement of recognized gains and losses.

5. Where the fair value of the biological asset cannot be determined reliably on initial recognition,
the biological asset should be measured at
a. Cost.
b. Cost less accumulated depreciation.
c. Cost less accumulated depreciation and accumulated impairment losses.
d. Net realizable value.

6. Which of the following costs are not included in costs to sell?

a. Commissions to brokers and dealers.
b. Levies by regulatory agencies.
c. Transfer taxes and duties.
d. Transport and other costs necessary to get the assets to a market.

Use the following information for the next four questions:

The following information pertains to Madagascar Co.
Sheep 500,000 Wool 6,000
Rubber products 10,000 Thread 3,000
Trees in a timber plantation 95,000 Felled trees 8,000
Maize plants 40,000 Clothing 150,000
Lumber 62,000 Milk 9,000
Pigs 200,000 Carcass 7,000
Roasted peanuts 20,000 Sugar 67,000
Cotton plants 10,000 Harvested cotton 13,000
Peanut plants 5,000 Harvested peanuts 140,000
Sugarcane 25,000 Harvested cane 22,000
Tobacco plants 45,000 Picked leaves 3,000
Tea bushes 800,000 Oil palms 300,000
Dairy cattle 1,000,000 Picked grapes 2,000
Fruit trees 600,000 Picked fruit 10,000
Tea 43,000 Grape vines 2,000,000
Rubber trees 300,000 Harvested latex 10,000
Yarn 22,000 Cured tobacco 320,000
Carpet 33,000 Wine 500,000
Logs 45,000 Processed fruit 20,000
Wheat plants 60,000 Palm oil 50,000
Cheese 75,000 Bean plants 20,000
Sausages 88,000 Cured hams 92,000

7. How much is classified as biological assets that are accounted for under PAS 41 Agriculture?
a. 2,660,000 b. 2,000,000 c. 6,000,000 d. 2,250,000

8. How much is classified as property, plant and equipment that are accounted for under PAS 16
Property, Plant and Equipment?
a. 4,000,000 b. 4,860,000 c. 4,560,000 d. 3,650,000

9. How much is classified as agricultural produce?

a. 149,000 b. 248,000 c. 290,000 d. 230,000

10. How much is classified as inventory?

a. 1,480,000 b. 1,600,000 c. 1,540,000 d. 1,880,000
SOLUTIONS:

BA PPE AP INVTY
Sheep 500,000
Rubber products 10,000
Trees in a timber plantation 95,000
Maize plants 40,000
Lumber 62,000
Pigs 200,000
Roasted peanuts 20,000
Cotton plants 10,000
Peanut plants 5,000
Sugarcane 25,000
Tobacco plants 45,000
Tea bushes 800,000
Dairy cattle 1,000,000
Fruit trees 600,000
Tea 43,000
Rubber trees 300,000
Yarn 22,000
Carpet 33,000
Logs 45,000
Wheat plants 60,000
Cheese 75,000
Sausages 88,000
Wool 6,000
Thread 3,000
Felled trees 8,000
Clothing 150,000
Milk 9,000
Carcass 7,000
Sugar 67,000
Harvested cotton 13,000
Harvested peanuts 140,000
Harvested cane 22,000
Picked leaves 3,000
Oil palms 300,000
Picked grapes 2,000
Picked fruit 10,000
Grape vines 2,000,000
Harvested latex 10,000
Cured tobacco 320,000
Wine 500,000
Processed fruit 20,000
Palm oil 50,000
Bean plants 20,000
Cured hams 92,000
TOTALS 2,000,000 4,000,000 230,000 1,600,000