DEC 2019

SOLUTION 4

a. Agriculture activity: It is the management by an entity of the biological transformation

of biological assets for sale, into the agriculture produce or into additional biological
assets.

Agriculture produces is the harvested of biological assets.

b.

i. The total gain or loss on fair value less costs to sell of the animals due to price
changes and physical changes for the year ended 30 June 2018
Note: 1. Revenue (Price changes and physical changes)
(Change of FV less CTS; c/d -b/d)
e.g: c/d of FV less CTS RM10,0000
b/d of FV less CTS RM 8,000
Changes : RM2,000 of revenues (Distinguish the price changes and physical
changes)
Accounting period = 1July 2017- 30 June 2018

RM RM
Gain on change in FV-CTS due to PRICE
CHANGES
50, 2.5 yo 50 × (1,650-1,500) 7,500
10, 2.5 yo 10 × (1,650-1,600) 500
20, 2 yo 20 × (1,450-1,400) 1,000
5, NB 5 × (300-250) 250
Total gain on FV-CTS due to price changes 9,250

Gain on change in FV-CTS due to PHYSICAL

CHANGE
50, 3.5 yo 50 × (2,500-1,650) 42,500
10, 3.0 yo 10 × (2,000-1,650) 3,500
20, 2.5 yo 20 × (1,650-1,450) 4,000
5, 3 month 5 × (400-300) 500
NB 5 × 250 1,250
Total gain on FV-CTS due to physical changes 51,750

Total gain on FV-CTS (REVENUE) 61,000

ii. Relevant journal entries for the year ended 30 June 2018
Purchase during the year
(10 X RM1,600)= RM16,000
(20 X RM1,400)= RM28,000
= RM44,000

1 January 2018
Dr Biological assets 44,000
Cr Bank/ Cash/Payables 44,000
 30 June 2018
Dr Biological assets 61,000
Cr SOPL 61,000

DEC 2018

SOLUTION 4

a. Biological transformation comprises the processes of growth, degeneration,

production, and procreation that cause qualitative or quantitative changes in a
biological asset.
b. i.
Dr Biological assets (10 x RM600) 6,000
Cr SOPL 6,000

SOPL SOFP
RM (ii) RM (iii)
1 January 2018
b/f : Fair value (120 x RM1,000) 120,000
b/f : Fair value (80 x RM1,900) 152,000
Purchases: 1 July 2018 -1 ½ yo (50 x RM1,100) 55,000
327,000
Gain on change in FV-CTS due to price changes
120 × (1,600-1,000) 72,000
80 × (2,200-1,900) 24,000
50 × (1,600-1,100) 25,000
10 × (750-600) 1,500

Total gain on FV-CTS due to price changes 122,500

Gain on change in FV-CTS due to physical change

120 × (2,200-1,600) 72,000
80 × (3,200-2,200) 80,000
50 × (1,800-1,600) 10,000
10 × (840-750) 900
10 × 600 6,000

Total gain on FV-CTS due to physical changes 168,900

Changes in FV of biological assets 291,400 291,400

FV of biological assets as at 31 December 2018 618,400
Alternative answer to carrying value as at 31 December 2018

FV-CTS
120 2 ½ × (120 x 2,200) 264,000
80 3 ½ × (80 x 3,200) 256,000
50 2 yo × (50 x 1,800) 90,000
10 3 mo × (10 x 840) 8,400
FV-CTS as at 31 December 2018 618,400