How much gross income shall be reported

Reference no: EM132810300

Question

A group of twenty 2 - year old cattle was held at January 1, 2029.
On this date, five 2 - year old cattle were purchased for P12,000 each and 5 calves were born. No cows or calves were disposed of during the period. Per unit fair values less cost to sell were as follows:

January 1, 2029
2 - year old cattle P 12,000
Newborn cattle 4,000

December 31, 2029
2 - year old cattle 13,000
3 - year old cattle 15,000
1 - year old cattle 7,000
Newborn cattle 5,000

The company records separately the increase in fair value less cost to sell due to physical change and change in fair value less cost to sell due to price change.

Assume that ten 3 - year old cattle were sold realizing net proceeds of P15,000 on each cattle. How much gross income shall be reported on the company's profit or loss for the year ended December 31, 2029?

Reference no: EM132810300

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