On January 1, 2016, an entity purchased 100 cows which are 3 years old for P15, 000 each for the purpose of producing milk for the local community. On July 1, 2016, the cows give birth to 20 calves.

The active market provided the fair value less cost to sell of the biological assets as follows:

New born calf on July 1	4,000
New born calf on December 31	5,000
year old calf on December 31	7,000
3 years old calf on December 31	18,000
4 years old cow on December 31	24,000

Required:

(a) Prepare all indicated journal entries for 2016 necessary to record all the transactions relating to biological asset.

(b) Determine the price, physical change and total change in fair value.

(c) Determine the carrying amount of the biological asset on December 31, 2016 and indicate the financial statement presentation of the accounts related to the biological assets.

(a)

Biological Asset	1,500,000
Cash	1,500,000
To record the acquisition of 100 cows at P15, 000 each or a total of P1.5 million.
Biological Asset	80,000
Gain from change in fair value	80,000
To record birth of 20 calves with a fair value of P4,000 each or a total of P80,000
Biological Asset	960,000
Gain from change in fair value	960,000
To record the change in fair value of the cows and calves on December 31, 2016
Cows which are now 4 years old
Calves which are now 12 year old
Total fair value as at December 31
Carrying amount
Change in fair value

(b)

Price Change
4 years old cows
year old calves
Total price change	320,000
Physical Change
4 years old cows
year old calves
Newborn, at birth
Total physical change	720,000
Total change in fair value