Reference no: EM133002330

PROBLEM 1 - On December 31, 2021, the following data was provided by PEASHOOTER CORP., a company operating in a diverse agricultural activity:

Item Amount:

1. Sheep Php 400,000

2. Felled trees 2,680,000

3. Harvested cane 1,160,000

4. Coconut trees 4,800,000

5. Dairy cattle 4,000,000

6. Cigarette (Marlboro) 41,000

7. Sausages 20,000

8. Cured hams 36,000

9. Pig carcass 230,000

10. Fruit pickles 120,000

11. Trees in the plantation forest 12,000,000

12. Harvested cabbage 40,000

13. Carpet 260,000

14. Grape vines 1,500,000

15. Picked grapes 180,000

16. Wool 160,000

17. Tea 38,200

18. Cotton 1,360,000

19. Plants 1,400,000

20. Thread 80,000

21. Carrots due to be harvested next week 200,000

22. Low-fat milk 520,000

23. Wine 6,000,000

24. Picked fruit 49,400

25. Frozen lechon 120,000

26. Mango tree with ripe mango not yet harvested 1,400,000

27. K-9 guard dogs 300,000

28. Animals in zoo 24,000,000

29. Dinosaur statue in zoo 1,000,000

30. Tomato vines (with ripe fruit ready to harvest) 500,000

31. Strawberry plants 1,500,000

Required - Compute for the following to be presented on the statement of financial position:

a. Biological assets

b. Agricultural produce

c. Inventories

d. Property, plant and equipment

PROBLEM 2 - CHOMPER INC. purchased 100 pigs at an auction for Php 800,000 on July 1, 2021.

Transportation costs were Php 8,000. CHOMPER would have to incur the same transportation cost if it had sold its pigs in the auction. In addition, there would be a 2% auctioneer's fee on the market price of pigs' payable to the seller.

On December 31, 2021, the fair value of the pigs in the most relevant market increases to Php 880,000.

On May 2, 2022, CHOMPER sold 18 pigs at auction for Php 160,000 and incurred transportation charges of Php 1,200.

On June 15, 2022, the fair value of the remaining pigs was Php 662,560 but on the same date, 42 pigs were slaughtered with total cost of Php 33,600. The fair value of the carcasses on that day was Php 386,400 and estimated transportation costs to sell the carcasses is Php 3,360. No other selling costs are expected.

On June 30, 2022, the fair value of the remaining 40 pigs was Php 358,400. The estimated transportation cost is Php 3,200.

Required - Answer the following questions:

a. What amount should the biological asset be initially recorded on July 1, 2021?

b. What amount should the biological asset be reported on December 31, 2021?

c. What amount of gain (loss) as a result in the change in value of the biological asset to be reported in the statement of comprehensive income for the year ended December 31, 2021?

d. What is the net proceeds from the sale of pigs on May 2, 2022?