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CHAPTER 8 - Agriculture Problem 8-1: True or False: Loss 30

This document contains sample problems and solutions related to accounting for agriculture and investment property under Philippine Financial Reporting Standards. For agriculture, it addresses concepts like biological assets, agricultural produce, and government grants. For investment property, it covers measurement, depreciation, impairment, and impairment reversals. The problems assess understanding of accounting treatments for various scenarios involving biological assets and investment property.

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Stefanie Fermin
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953 views

CHAPTER 8 - Agriculture Problem 8-1: True or False: Loss 30

This document contains sample problems and solutions related to accounting for agriculture and investment property under Philippine Financial Reporting Standards. For agriculture, it addresses concepts like biological assets, agricultural produce, and government grants. For investment property, it covers measurement, depreciation, impairment, and impairment reversals. The problems assess understanding of accounting treatments for various scenarios involving biological assets and investment property.

Uploaded by

Stefanie Fermin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Fermin, Stefanie Ashley Rose A.

BSA - IV

CHAPTER 8 - Agriculture
PROBLEM 8-1: TRUE OR FALSE
1. FALSE - only when they relate to agricultural activity.
2. TRUE
3. TRUE
4. TRUE
5. TRUE
6. TRUE
7. FALSE - transport costs not transaction costs
8. TRUE - Biological Asset (at FVLCS, 100 – 20) 80
Loss 30
Cash (100 + 10) 110
9. FALSE - ₱30 (100 – 70)
10.TRUE

PROBLEM 8-2: MULTIPLE CHOICE


1. C
2. D
3. B
4. A
5. D
6. D
7. A
8. A
9. D
10.C

PROBLEM 8-3: FOR CLASSROOM DISCUSSION


1. B
2. A
3. D
4. D
5. C
6. B
7. C
8. A
9. A
Asset Group Change in FVLCS
From beg. (1 yr.; 1 yr.) (₱1,200 - ₱1,000) x 1 200
Purchased on July 1 (1 yr.; 1 yr.) (₱1,200 - ₱1,100) x 1 100
Born on Oct. 1 (0; 0) (₱600 - ₱500) x 1 100
Change in FVLCS due to Price Change 400 (A)

10. D
Asset Group Change in FVLCS
From beg. (2yrs.; 1yr.) (₱2,000 - ₱1,200) x 1 800
Purchased on July 1 (1.5yrs.; 1yr.) (₱1,500 - ₱1,200) x 1 300
Born on Dec. 31 (3 mos.; 0 yr.) (₱800 - ₱600) x 1 200
FVLCS of new born on Dec. 31 (₱500 x 1) 500
Change in FVLCS due to Physical Change 1,800 (D)

CHAPTER 9 - Investment Property


PROBLEM 9-1: TRUE OR FALSE
1. FALSE - shall not capitalize because it is not part of the cost of an investment property
2. FALSE - fair value is not allowed for government entities.
3. FALSE - shall depreciate
4. FALSE - higher
5. FALSE - if carrying amount exceeds its recoverable amount
6. FALSE
7. TRUE
8. FALSE - ₱2
9. FALSE – an entity computes for recoverable amount only if there is indication of impairment
10.TRUE

PROBLEM 9-2: MULTIPLE CHOICE


1. D
2. D
3. D
4. A
5. C
6. B
Solution:
(1,500,000 x 95% x 5/30) = 237,500 accumulated depreciation
C.A. 12/31/x5: (1,500,000 – 237,500) = 1,262,500
Gain (loss) = (1,300,000 – 1,262,500) = 37,500 gain (B)

7. C (1,000,000 – 900,000) = 100,000


8. A (900,000 x 95%) ÷ 10 = 85,500
9. C
Solution:
New recoverable amount: 800,000 (higher)
C.A. at date of impairment reversal: [900,000 – (85,500 x 5 yrs.)] = 472,500
Gain on impairment reversal = (600,000 – 472,500) = 127,500 (C)

10. D

PROBLEM 9-3: FOR CLASSROOM DISCUSSION


1. D
2. D – equipment cannot be classified as investment property
3. B
4. C
5. A
6. B
(1,000,000 + 50,000 + 20,000) = 1,070,000 – (1,070,000 x 5%) = 1,016,500 ÷ 10 yrs. = 101,650
annual depreciation = (1,070,000 – 101,650) = 968,350 (B)

7. B
8. A
9. D
Solution:
(1,500,000 x 95% x 5/30) = 237,500 accumulated depreciation
C.A. 12/31/x5: (1,500,000 – 237,500) = 1,262,500
Recoverable amount: 1,000,000 (higher)
Impairment loss = 1,262,500 – 1,000,000 = 262,500 (D)

10. A
Solution:
New recoverable amount: 1,100,000 (higher)
C.A. had no impairment loss been recognized in prior period:
(1,500,000 x 95% x 10/30) = 475,000 accumulated depreciation
C.A. 12/31/10: (1,500,000 – 475,000) = 1,025,000

C.A. at date of impairment reversal:


(1,000,000 x 95% x 5/25) = 190,000 accumulated depreciation
C.A. 12/31/10: (1,000,000 – 190,000) = 810,000
Gain on impairment reversal = (1,025,000 – 810,000) = 215,000 (A)

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