Question 1

When determining the fair value of biological assets and there is no market price for that asset in its present condition AASB 141 requires that:

Accepted Answer

A)  the entity uses the present value of expected net cash flows from the asset discounted at a current market-determined pre-tax rate. 
B)  the entity measure the asset at cost. 
C)  the entity uses the contract prices for recent sales of similar assets adjusted for the effects of biological transformation. 
D)  the entity uses sector benchmarks. 
A)  the entity uses the present value of expected net cash flows from the asset discounted at a current market-determined pre-tax rate. 
B)  the entity measure the asset at cost. 
C)  the entity uses the contract prices for recent sales of similar assets adjusted for the effects of biological transformation. 
D)  the entity uses sector benchmarks. A

Question 2

Milko owns dairy cattle. The market value of the cattle is calculated by reference to the litres of milk able to be produced and the lactation rate of the cows. The cattle are regularly sold at auction. Costs incurred to transport the cattle to auction are $500 per truck. Each truck can transport approximately 100 cattle.
$\begin{array}{ll}
\text { Number of mature cows held at } 30 \text { June } 2013 & 5000 \
\text { Average liters of production per cow } & 6000 \text { liters } \
\text { Lactation rate } & 50 \% \
\text { Price per litre } & 40 \text { cents }
\end{array}$
The market value for each cow at 30 June 2013 is:

Accepted Answer

A)  $1000 
B)  $1195 
C)  $1200 
D)  $1205 
A)  $1000 
B)  $1195 
C)  $1200 
D)  $1205 C

Question 3

AASB 141 requires that biological assets be measured as follows:

Accepted Answer

A)  on initial recognition and at the end of each reporting period at fair value less costs to sell 
B)  on initial recognition and at the end of each reporting period at its fair value less costs to sell, except where the fair value cannot be measured reliably 
C)  at fair value-less estimated costs to sell at the point of harvest 
D)  at fair value less costs to sell at the point of harvest 
A)  on initial recognition and at the end of each reporting period at fair value less costs to sell 
B)  on initial recognition and at the end of each reporting period at its fair value less costs to sell, except where the fair value cannot be measured reliably 
C)  at fair value-less estimated costs to sell at the point of harvest 
D)  at fair value less costs to sell at the point of harvest B

Question 4

Which of the following statements is correct in relation to government grants?

Accepted Answer

A)  Government grants for biological assets measured at fair value are accounted for under AASB 141. 
B)  Government grants for biological assets measured at cost are accounted for under AASB 141. 
C)  Government grants for biological assets measured at fair value are accounted for under AASB 120. 
D)  Government grants for biological assets measured at cost are accounted for under AASB 118. 
A)  Government grants for biological assets measured at fair value are accounted for under AASB 141. 
B)  Government grants for biological assets measured at cost are accounted for under AASB 141. 
C)  Government grants for biological assets measured at fair value are accounted for under AASB 120. 
D)  Government grants for biological assets measured at cost are accounted for under AASB 118.

Question 5

Which of the following would be disclosed in the Statement of Financial Position as a biological asset under AASB 141?

Accepted Answer

A)  Vines 
B)  Picked fruit 
C)  Cotton 
D)  Timber 
A)  Vines 
B)  Picked fruit 
C)  Cotton 
D)  Timber

Question 6

Which of the following is NOT a reason as to why the IASC felt that agriculture was an industry that needed its own industry specific standard?

Accepted Answer

A)  the specific exclusion of assets related to agricultural activity from other standards 
B)  agriculture was considered to be an emerging industry at that time 
C)  accounting guidelines for agricultural activity previously developed by national standard setters had been piecemeal 
D)  the nature of agricultural activity had created uncertainty or conflicts when applying traditional accounting models 
A)  the specific exclusion of assets related to agricultural activity from other standards 
B)  agriculture was considered to be an emerging industry at that time 
C)  accounting guidelines for agricultural activity previously developed by national standard setters had been piecemeal 
D)  the nature of agricultural activity had created uncertainty or conflicts when applying traditional accounting models

Question 7

Increases in fair value over cost in relation to land used for agricultural purposes is recognised in equity when the land is:

Accepted Answer

A)  an investment property measured at fair value and accounted for under AASB 140 
B)  an investment property measured at cost and accounted for under AASB 140 
C)  not an investment property, is measured at fair value and accounted for under AASB 116 
D)  not an investment property, is measured at cost and accounted for under AASB 116 
A)  an investment property measured at fair value and accounted for under AASB 140 
B)  an investment property measured at cost and accounted for under AASB 140 
C)  not an investment property, is measured at fair value and accounted for under AASB 116 
D)  not an investment property, is measured at cost and accounted for under AASB 116

Question 8

Which of the following is NOT considered an agricultural activity?

Accepted Answer

A)  oyster farming 
B)  ocean fishing 
C)  pearl farming 
D)  fish farming 
A)  oyster farming 
B)  ocean fishing 
C)  pearl farming 
D)  fish farming

Question 9

The entry required when an animal is born on a pig farm is:

Accepted Answer

A)  
DR$\quad$ Biological asset$\quad$$\mathrm { xx }$
CR$\quad$ Profit & Loss$\quad$$\mathrm { xx }$ 
B)  
DR $\quad$Agricultural produce$\quad$$\mathrm { xx }$
CR $\quad$Profit & Loss$\quad$$\mathrm { xx }$ 
C)  
DR $\quad$Profit & Loss$\quad$$\mathrm { xx }$
CR$\quad$ Biological asset$\quad$$\mathrm { xx }$ 
D) 
$\begin{array} { l l l } 
\text { DR } & \text { Profit \& Loss } & \mathrm { xx } \
& \mathrm { CR } \quad \text { Agricultural produce } & \mathrm { xx }
\end{array}$ 
A)  
DR$\quad$ Biological asset$\quad$$\mathrm { xx }$
CR$\quad$ Profit & Loss$\quad$$\mathrm { xx }$ 
B)  
DR $\quad$Agricultural produce$\quad$$\mathrm { xx }$
CR $\quad$Profit & Loss$\quad$$\mathrm { xx }$ 
C)  
DR $\quad$Profit & Loss$\quad$$\mathrm { xx }$
CR$\quad$ Biological asset$\quad$$\mathrm { xx }$ 
D) 
$\begin{array} { l l l } 
\text { DR } & \text { Profit \& Loss } & \mathrm { xx } \
& \mathrm { CR } \quad \text { Agricultural produce } & \mathrm { xx }
\end{array}$

Question 10

At 30 June 2013 the fair value of WineCo's vineyard is $2.5 million. At 30 June 2014 the following information is available:
$\begin{array}{ll}
\text { Fair value of vines prior to harvest at 31 March 2014 } & \$ 3,100,000 \
\text { Fair value of grapes harvested at 31 March 2014 } & \$ 500,000 \
\text { Estimated costs to sell - grapes } & \$ 10,000 \
\text { Estimated costs to sell - vines } & \$ 20,000
\end{array}$
-
There have been no changes in fair values between 1 April and 30 June 2014.
At 30 June 2014 the vines will be recorded in WineCo's financial statements at an amount of:

Accepted Answer

A)  $2 580 000 
B)  $2 600 000 
C)  $2 980 000 
D)  $3 100 000 
A)  $2 580 000 
B)  $2 600 000 
C)  $2 980 000 
D)  $3 100 000

Question 11

At 30 June 2013 the fair value of WineCo's vineyard is $2.5 million. At 30 June 2014 the following information is available:
$\begin{array}{ll}
\text { Fair value of vines prior to harvest at 31 March 2014 } & \$ 3,100,000 \
\text { Fair value of grapes harvested at 31 March 2014 } & \$ 500,000 \
\text { Estimated costs to sell - grapes } & \$ 10,000 \
\text { Estimated costs to sell - vines } & \$ 20,000
\end{array}$
-
The entry to recognise the grapes at the point of harvest is:

Accepted Answer

A)  DR $\quad$Agricultural produce - grapes $\quad 500000$ 
CR$\quad$ Biological asset - vines $\quad 500000$ 
B)  $\begin{array} { l l l } 
\text { DR } \quad  \text { Agricultural produce } - \text { grapes } & 510,000 \
\text { CR } \quad \text { Cash } &  10,000 \
\text { CR } \quad \text { Biological asset } - \text { vines } & 500,000
\end{array}$ 
C)  DR $\quad$Agricultural produce - grapes $\quad 500,000$ 
CR $\quad$Profit & loss $\quad 500,000$ 
D)  DR $\quad$Agricultural produce - grapes $ \quad 490000 $
CR $\quad$Profit & loss $ \quad 490000 $ 
A)  DR $\quad$Agricultural produce - grapes $\quad 500000$ 
CR$\quad$ Biological asset - vines $\quad 500000$ 
B)  $\begin{array} { l l l } 
\text { DR } \quad  \text { Agricultural produce } - \text { grapes } & 510,000 \
\text { CR } \quad \text { Cash } &  10,000 \
\text { CR } \quad \text { Biological asset } - \text { vines } & 500,000
\end{array}$ 
C)  DR $\quad$Agricultural produce - grapes $\quad 500,000$ 
CR $\quad$Profit & loss $\quad 500,000$ 
D)  DR $\quad$Agricultural produce - grapes $ \quad 490000 $
CR $\quad$Profit & loss $ \quad 490000 $

Question 12

Which of the following statements is NOT correct?

Accepted Answer

A)  Management facilitates biological transformation 
B)  Management is a key part of the definition of agricultural activity under AASB 141 
C)  There is a link between management and control of a biological asset 
D)  Management is a key part of the recognition criteria for biological assets and agricultural produce 
A)  Management facilitates biological transformation 
B)  Management is a key part of the definition of agricultural activity under AASB 141 
C)  There is a link between management and control of a biological asset 
D)  Management is a key part of the recognition criteria for biological assets and agricultural produce

Question 13

AASB 141 applies to the accounting for the following when they relate to agricultural activity:
I agricultural produce
II biological assets
III land related to agricultural activity
IV government grants

Accepted Answer

A)  I, II and III 
B)  II, III and IV 
C)  I, II and IV 
D)  I, III and IV 
A)  I, II and III 
B)  II, III and IV 
C)  I, II and IV 
D)  I, III and IV

Question 14

Which of the following is NOT one of the recognition criteria contained within AASB 141 in relation to recognition of a biological asset or agricultural produce as an asset?

Accepted Answer

A)  the asset has physical form 
B)  the entity controls the asset as a result of past events 
C)  it is probable that future economic benefits associated with the asset will flow to the entity 
D)  the fair value or cost can be reliably measured 
A)  the asset has physical form 
B)  the entity controls the asset as a result of past events 
C)  it is probable that future economic benefits associated with the asset will flow to the entity 
D)  the fair value or cost can be reliably measured

Question 15

Which of the following meets the definition of agricultural produce?

Accepted Answer

A)  Dairy cattle 
B)  Milk 
C)  Cheese 
D)  Yoghurt 
A)  Dairy cattle 
B)  Milk 
C)  Cheese 
D)  Yoghurt

Question 16

RuralCo received a $100 000 grant from the government on 1 July 2013. One of the conditions attached to the grant was the Rural Co had to continue farming in the same location for the next 2 years, otherwise the grant would have to be retuned in full.
The entry to record the receipt of the grant is:

Accepted Answer

A)  $\begin{array}{llll}
\text { DR } & \text { Cash }& 100,000 \
\text { CR }& \text { Revenue }& 100,000 \
\end{array}$ 
B)  $\begin{array} { c l l l } 
\text { DR } & \text { Cash } &{ 100,000 } \
\text { CR } & \text { Revenue } & 50,000 \
\text { CR } & \text { Performance obligation } & 50,000
\end{array}$ 
C)  $\text { DR\quad  Cash } \quad 100,000$
$\text { CR\quad  Performance obligation } \quad 100,000$ 
D)  No entry required as the grant is conditional and cannot be recognised until the conditions attached to the grant are met. 
A)  $\begin{array}{llll}
\text { DR } & \text { Cash }& 100,000 \
\text { CR }& \text { Revenue }& 100,000 \
\end{array}$ 
B)  $\begin{array} { c l l l } 
\text { DR } & \text { Cash } &{ 100,000 } \
\text { CR } & \text { Revenue } & 50,000 \
\text { CR } & \text { Performance obligation } & 50,000
\end{array}$ 
C)  $\text { DR\quad  Cash } \quad 100,000$
$\text { CR\quad  Performance obligation } \quad 100,000$ 
D)  No entry required as the grant is conditional and cannot be recognised until the conditions attached to the grant are met.

Question 17

Use the following information to answer questions 
CowCo is a company that farms dairy cattle. CowCo owns the farmland on which the cattle are located, having purchased it for $1.5 million in 2011. The land is measured at cost under AASB 116.
Details of cattle at 30 June 2013 were as follows:
 $\begin{array}{ll}&\text { Cows } & \text { Helfers } \
\text { Number}&900&200\
\text { Fair value (less estimated costs to sell) }&\$800&\$320
\end{array}$
 During the year ended 30 June 2014 the following occurred:
•	200 new cows were purchased at $810 each
•	50 heifers matured into cows
•	5 heifers died
•	100 cows were sold for $830 each
•	The price change between a heifer and a cow at the time of maturity during the year was estimated to be $500

The following is relevant at 30 June 2014:
•	The land has been valued at $5.6 million
•	Fair value less estimated costs to sell are as follows (CowCo has determined that these are the appropriate fair values to use for the purposes of transfers and deaths of heifers):
o	Cows - $850 /head
o	Heifers - $350/head

-The increase in fair value of livestock attributable to price change is:

Accepted Answer

A)  $76 000 
B)  $57 000 
C)  $25 000 
D)  $6 000 
A)  $76 000 
B)  $57 000 
C)  $25 000 
D)  $6 000

Question 18

Fishy Co operates a fish farm. AASB 141 requires live immature fish to be valued at:

Accepted Answer

A)  cost due to the absence of an active market for such fish 
B)  the fair value less costs to sell based on prices of slaughtered immature fish 
C)  either cost or fair value less estimated costs to sell 
D)  fair value determined by applying a discount factor to the fair value of live mature fish. 
A)  cost due to the absence of an active market for such fish 
B)  the fair value less costs to sell based on prices of slaughtered immature fish 
C)  either cost or fair value less estimated costs to sell 
D)  fair value determined by applying a discount factor to the fair value of live mature fish.

Question 19

Which of the following is NOT a cost to sell?

Accepted Answer

A)  commissions to brokers 
B)  transfer taxes and duties 
C)  levies by regulatory agencies 
D)  transport costs to get assets to a market 
A)  commissions to brokers 
B)  transfer taxes and duties 
C)  levies by regulatory agencies 
D)  transport costs to get assets to a market

Question 20

Agricultural produce is defined in AASB 141 as:

Accepted Answer

A)  a living animal or plant 
B)  a living product capable of biological transformation 
C)  the harvested product of the entity's biological assets 
D)  the detachment of produce from a biological asset or cessation of a biological asset's life processes 
A)  a living animal or plant 
B)  a living product capable of biological transformation 
C)  the harvested product of the entity's biological assets 
D)  the detachment of produce from a biological asset or cessation of a biological asset's life processes

Exam 18: Agriculture

When determining the fair value of biological assets and there is no market price for that asset in its present condition AASB 141 requires that:

AASB 141 requires that biological assets be measured as follows:

Which of the following statements is correct in relation to government grants?

Which of the following would be disclosed in the Statement of Financial Position as a biological asset under AASB 141?

Which of the following is NOT a reason as to why the IASC felt that agriculture was an industry that needed its own industry specific standard?

Increases in fair value over cost in relation to land used for agricultural purposes is recognised in equity when the land is:

Which of the following is NOT considered an agricultural activity?

The entry required when an animal is born on a pig farm is:

Which of the following statements is NOT correct?

AASB 141 applies to the accounting for the following when they relate to agricultural activity: I agricultural produce II biological assets III land related to agricultural activity IV government grants

Which of the following is NOT one of the recognition criteria contained within AASB 141 in relation to recognition of a biological asset or agricultural produce as an asset?

Which of the following meets the definition of agricultural produce?

Fishy Co operates a fish farm. AASB 141 requires live immature fish to be valued at:

Which of the following is NOT a cost to sell?

Agricultural produce is defined in AASB 141 as:

Accounting Regulation and the Conceptual Framework

Application of Accounting Theory

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

Share-Based Payments

Translation of the Financial Statements of Foreign Entities

Employee Benefits

Inventories

Property, Plant and Equipment

Leases

Understanding Australian Accounting Standards

Impairment of Assets

Accounting for Mineral Resources

Financial Statement Presentation

Statement of Cash Flows

Earnings Per Share

Operating Segments

Operating Segments

Business Combinations

Consolidation: Principles and Accounting Requirements

Consolidation: Intragroup Transactions

Consolidation: Non Controlling Interest

Joint Arrangements

Associates and Joint Ventures

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