C. Explain the accounting for biological assets state any exceptions.

Initial measurement – FVLCS

Subsequent measurement – FVLCS

Changes in FVLCS – Profit or loss

Exception: FVLCS of biological asset cannot be determined reliably at initial recognition.

- Initial measurement – Cost

- Subsequent measurement – Cost less accumulated depreciation, less accumulated impairment losses.

3. How much is classified as agricultural produce?

Answer: A

Solution:

Wool 6,000

Felled trees 8,000

Milk 9,000

Carcass 7,000

Harvested cotton 13,000

Harvested peanuts 140,000

Harvested cane 22,000

Picked leaves 3,000

Picked grapes 2,000

Picked fruit 10,000

Harvested latex 10,000

Total agricultural produce 230,000

7. How much is the change in FVLCS due to price change?

Answer: D

Solution:
Formula: Due to price change

(FVLCS, end. Age as of beg.) – (FVLCS, beg. Age as of beg.) x Qty.

I. Three animals from beginning of the period :

(P1,200- P1,000) x 3 P600

I. Two animals purchased during the period

(3,000-2,000) x 2 2,000

II. Six animals born during the period

(600-500) x 6 600

Change in FVLCS attributable to PRICE CHANGE P 3,200