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What amount of unrealized gain on biological assets

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Reference no: EM132969026

Question - Dub Dairy produces milk to sell to local and national ice cream producers. Dub Dairy began operations on January 1, 2015 by purchasing 840 milk cows for P1,176,000. The company controller had the following information available at year end relating to the cows:

Milking cows

Carrying value, January1, 2015 1,176,000

Change in fair value due to growth and price changes 365,000

Decrease in fair value due to harvest (42,000)

Milk harvested during 2015 54,000

1. At December 31, 2015, what is the value of the milking cows on Dub Dairy's statement of financial position?

a. 1,134,000

b. 1,499,000

c. 1,541,000

d. 1,176,000

2. On Dub Dairy's income statement for the year ending December 31, 2015, what amount of unrealized gain on biological assets will be reported?

a. 323,000

b. 54,600

c. 365,000

d. 0

3. On Dub Dairy's income statement for the year ending December 31, 2015, what amount of unrealized gain on harvested milk will be reported?

a. 311,000

b. 12,000

c. 54,000

d. no gain is reported until the milk is sold

Reference no: EM132969026

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