You are working as the chief accountant of Ganyu Co., who does business in a specialized industry. Ganyu is into agriculture, the company owns a coffee plantation and raises animals for their meat and other produce. During the year, a farmland with a mango plantation and rice fields was also acquired. Information about the animals Ganyu held were as follows: Ganyu Co. has the following animals as of January 1, 2021: 350 cows (average age, 2 years old) 200 heifers (average age, 1-year old) Ganyu also purchased 175 heifers, average age 1-year old, on July 1, 2021 Also, 75 animals were born on July 1, 2021. The unit values less estimated costs to sell were. 1-year old animal at December 31, 2021 P12,200 2-year old animal at December 31, 2021 14,500 1.5-year old animal at December 31, 2021 12,600 3-year old animal at December 31, 2021 15,000 1-year old animal at January 1, 2021 and July 1, 2021 12,000 2-year old animal at January 1, 2021 14,000 0.5 year old at December 31, 2021 4,000 Newborn at July 1, 2021 2,000 Newborn at December 31, 2021 2,800 The animals produced 1,000 litres of milk during the year which had a point of harvest fair value of P375,000 and a cost to sell of P50,000. Animals: The growth of the animals present a challenge in their valuation, determine the following changes related to them. 1. For the year 2021, what amount of gain on change in fair value will be presented? 2. What portion of the gain on change in fair value can be attributed to price change? 3. What portion of the gain on change in fair value can be attributed to physical change? 4. What will be presented as biological assets in the 2021 financial statements?
You are working as the chief accountant of Ganyu Co., who does business in a specialized industry.
Ganyu is into agriculture, the company owns a coffee plantation and raises animals for their meat and
other produce. During the year, a farmland with a mango plantation and rice fields was also acquired.
Information about the animals Ganyu held were as follows:
Ganyu Co. has the following animals as of January 1, 2021:
350 cows (average age, 2 years old)
200 heifers (average age, 1-year old)
Ganyu also purchased 175 heifers, average age 1-year old, on July 1, 2021
Also, 75 animals were born on July 1, 2021.
The unit values less estimated costs to sell were.
1-year old animal at December 31, 2021 P12,200
2-year old animal at December 31, 2021 14,500
1.5-year old animal at December 31, 2021 12,600
3-year old animal at December 31, 2021 15,000
1-year old animal at January 1, 2021 and July 1, 2021 12,000
2-year old animal at January 1, 2021 14,000
0.5 year old at December 31, 2021 4,000
Newborn at July 1, 2021 2,000
Newborn at December 31, 2021 2,800
The animals produced 1,000 litres of milk during the year which had a point of harvest fair value of
P375,000 and a cost to sell of P50,000.
Animals: The growth of the animals present a challenge in their valuation, determine the following
changes related to them.
1. For the year 2021, what amount of gain on change in fair value will be presented?
2. What portion of the gain on change in fair value can be attributed to price change?
3. What portion of the gain on change in fair value can be attributed to physical change?
4. What will be presented as biological assets in the 2021 financial statements?
Step by step
Solved in 5 steps with 8 images
