Reference no: EM132715307

Question: Calcium Company has herd of 50, 2-year old animals and 50, 1-year old animals on Jan 1, 2020. 20 animals aged 2.5 years old and 20 animals aged 1.5 years old were purchased on July 1, 2020. No animals were born during 2021.The fair values less cost to sell per unit were as follows:

Age Jan. 1 July 1 Dec. 31

1.0-yr old P2,500 P3,000 P 3,500

1.5-yr old 3,750 4,500 5,250

2.0-yr old 5,000 6,000 7,000

2.5-yr old 6,250 7,500 8,750

3.0-yr old 7,500 9,000 10,500

This problem has 6 questions:

- What is the initial carrying amount of biological assets on January 1, 2020?

- What is the total cost of the animals purchased on July 1, 2020?

- How much shall be taken to profit or loss as a gain arising from change in fair value due to physical change?

- How much shall be taken to profit or loss as a gain arising from change in fair value due to price change?

- What amount shall be presented in the December 31, 2020. statement of financial position as biological assets?

- Assuming 60 3.0-yr old animals were sold on December 31, 2020 for a total proceeds of P630,000, how much gross income shall be reported on the company's profit or loss for the year ended December 31, 2020?