financial accounting chapter 19

FORESTER COMPANY

AFR/CA COMPA C OMPANY NY

Forester Company has reclassified certain assets as  biological assets The total !al"e of forest assets assets is P#$%%%$%%% &hich comprises P'$(%%$%%% freestanding trees$ P#%%$%%% land "nder trees and P)%%$%%% roads in forest 

Africa Company p"rchased 0%%% llamas at the  begging of c"rrent year These llamas &ill be sheared semiann"ally and their &ool sold to specialty clothing man"fact"res The llamas &ere  p"rchased for P'$%%%$%%% 1"ring the c"rrent year$ the change in fair !al"e d"e to gro&th and price changes is P)'%$%%%$ the &ool har!ested b"t not yet sold is !al"ed at net reali2able !al"e ! al"e of P(%%$%%%$ and the decrease in fair !al"e d"e to har!est is P'%$%%%

*hat amo"nt sho"ld be reported as biological b iological assets+ a.) 5,100,000

 b, '$-%%$%%% c, '$.%%$%%%

*hat is the carrying amo"nt of the biological asset at year3end+

d, #$%%%$%%%

a, '$)%%$%%%

 Land under unde r trees and roads in forest should be classified as property, plant, plant, and equipment.

 b, '$.%%$%%% c.) 5,400,000

d, '$(%%$%%%

SO45T/ON 4lamas p"rchased

P'$%%%$%%%

Change in fair !al"e

)'%$%%%

*ool har!ested b"t b"t not yet sold

(%%$%% $%%%

1ecrease in fair !al"e

6'%$%%%,

Biological assets

5,400,000

TEMER/TY COMPANY Temerity Company has different 7inds of farm animals on 8an"ary ($ 0%(' 1"ring the c"rrent year$ se!eral ac9"isitions occ"rred related to these farm animals A detailed of these transactions is as follo&s: Carrying amo"nt on 8an"ary (: (' ;orses (% 1airy Cattle   < Carabaos 0% ;ogs

6( 60 60' 6)

year old, years old, years old, years old,

($%%%$%%% .%%$%%% 0%%$%%% '%%$%%%

P"rchases on 8"ne )%: . 1airy Cattle # Carabaos

6( 6#

year old, months old,

('%$%%% (%%$%%%

( *hat is the carrying amo"nt of the biological assets on 1ecember )(+ a, )$(#%$%%% b.) 2,350,000 c, 0$