Reference no: EM132947913

Questions -

Q1) Legend Dairy produced milk for local ice cream producers. The entity began operations at the beginning of current year by purchasing milking cows for P2,000,000.

The entity provided the following information at year-end relating to the milking cows

Carrying amount - January 1 2,000,000

Change in fair value due to growth and price change 100,000

Decrease in fair value due to harvest 50.000

New-born calfat year-end at fair value 200,000

Milk harvested during the year but not yet sold 250,000

1. What amount of net gain on biological asset should be reported in the current year?

a 400,000

b. 350,000

c. 800,000

d 550,000

2. What amount of gain on agricultural produce should be recognized in the current year?

a. 250,000

b 200,000

c. 600,000

d. 650,000

3. What is the carrying amount of the biological asset it year-end?

a 2,000,000

b. 2,400.000

c. 2,650,000

d. 2,800,000

Q2) Karen Company reported the following information for the current year:

Beginning inventory 5,000,000

Purchases 26,000,000

Freight in 2,000,000

Purchase returns and allowances 3,500,000

Purchase discounts 1,500,000

Sales 10,000,000

Sales returns 3,000,000

Sales allowances 500,000

Sales discounts 1,000,000

A physical inventory taken at year-end resulted in an ending inventory costing P4,000,000.

At year-end, unsold goods out on consignment with selling price of P1,000,000 are in the hands of a consignee.

The gross profit was 40% on sales.

1. What is the cost of goods available for sale?

a. 28,000,000

b. 31,000,000

c. 33,000,000

d. 29,500,000

2. What is the cost of goods sold?

a. 21,900,000

b. 22,200,000

c. 21,300,000

d. 24,000,000

3. What is the estimated cost of inventory shortage?

a. 1,800,000

b. 2,700,000

c. 1,200,000

d. 2,100,000