1.Righteous Company provided the following data:

Value of biological asset at acquisition cost on December 31, 2020, P 6,000,000

Fair valuation surplus on initial recognition at fair value on 12/31/20, P 500,00

Change in fair value on 12/31/20 due to growth and price fluctuation, P 900,000

Decrease in fair value due to harvest, P 100,000

What is the carrying amount of the biological asset on December 31, 2020?

a.P7,400,000

b.P7,300,000

c.P7,500,000

d.P6,500,000

2.Using the same information in number (1), what amount of net gain from the change in fair value of biological assets should be reported in 2020?

a.P1,400,000

b.P1,300,000

c.P900,000

d.P800,000

3.Tamaraw Company purchased cattle at an auction for P 300,000 on July 1, 2020. Cost of transporting the cattle back to the company's farm was P 3,000 and the company would have to incur cost similar transportation cost if it was to sell the cattle in the auction in addition to auctioneer's fee of 2% of sales price.

On December 31, 2020, after taking into account the location, the fair value of the biological assets had increased to P 500,000 (that is, the market price including the cost of transporting the asset).

What amount should be the biological assets be initially recognized?

a.P291,000

b.P294,000

c.P297,000

d.P300,000

4.Using the same information in number (8), what amount should the biological assets be reported in the December 31, 2020 statement of financial position?

a.P487,000

b.P490,000

c.P497,000

d.P500,000

5.Using the same information in number (8), what amount of gain or loss should the company include in the statement of comprehensive income due to the change in the fair value of the biological assets?

a.P193,000

b.P196,000

c.P200,000

d.P209,000

6.Reverend Company acquired a new processing machine at the beginning of current year.

Invoice cost - terms 5/10, n/30, P 1,600,000

Cost of transportation, P 50,000

Cost of installation, P 50,000

Payment for strengthening the floor to support the weight of the new machine, P 150,000

The chief engineer spent two-thirds of his time during trial run of the new machine. The monthly salary is P 60,000.

During the year, the entity was granted a cash allowance of P 100,000 by the supplier because the machine proved to be of less than standard performance capability.

The operator of the old machine who was laid off due to the acquisition of the new machine was paid a gratuity of P 30,000

What amount should be the capitalized cost of the new machine?

a.P1,560,000

b.P1,640,000

c.P1,710,000

d.P1,590,000

7.At the beginning of the current year, Handsome Company purchased a mineral mine for P 36,000,000 with removable ore estimated by geological survey at 2,160,000 tons. The property has an estimated value of P 3,600,000 after the ore has been extracted. The entity incurred P 10,800,000 of development costs preparing the property for the extraction of ore. During the current year, 270,000 tons were removed, and 240,000 tons were sold.

a.P3,600,000

b.P4,050,000

c.P4,800,000

d.P5,400,000

8.Marauder Company borrowed P 15,000,000 at 12% to finance in part the construction of a new building on January 1, 2019 and in part for general purposes. The loan is to be repaid commencing the month following the completion of the building. Expenditures for the completed structure totaled P 10,000,000 during the year ended December 31, 2019. These expenditures were incurred evenly throughout the year. The entity earned interest of P 200,000 for the year on the unexpended portion of the loan.

What amount of interest is capitalized on December 31, 2019?

a.P1,200,000

b.P1,000,000

c.P600,000

d.P400,000