A public limited company, ABC Dairy Products, produces milk on its farms. As of January 1, 2018 ABC has a stock of 1,050 cows (average age, 2 yrs. old) and 150 heifers (average age, 1 yr. old).

Additional information:

• ABC purchased 375 heifers, average 1 year on July 1, 2010.No animals were born or sold during the year.
• The Company produced milk with a fair value of P660, 000 (that is determined at the time of milking) in the year ended 31 December 2018.” The Company also estimated the following costs:

Commissions to brokers and dealers                                                                      20,000

Transport and other costs necessary to get milk to a market                   10,000

• The company’s has had problems during the year. Contaminated milk was sold to customers. As a result, milk consumption has gone down. The government decided to compensate farmers for potential loss in revenue from sale of milk. This fact was published in the national press on December 1, 2018. ABC received an official letter on December 10, 2018, stating that P100,000 would be paid to it on April 3, 2019.
• The company’s business is spread over different parts of the country. The only region affected of the contamination was Region X, where the government curtailed milk production in the region. The cattle were unaffected by the contamination and were healthy. The company estimates that the future discounted cash flow income from the cattle in Region X amounted to P2 million, after taking into account the government restriction order. The company feels that it cannot measure the fair value of the cows in the region because of the problems created by the contamination. There are 300 cows and 100 heifers in the region. All these animals had been purchased before January 1, 2018. A rival company had offered ABC Pl.5 million for these animals after costs to sell and further offered P3 million for the farms themselves in that region. ABC has no intention of selling the farms at present.
• The fair values less costs to sell were

                        1 - year old animal at December 31, 2018                                          P   3, 200

                        2 - year old animal at December 31, 2018                                                 4,500

                         5 - year old animal at December 31, 2018                                               3,600

                         3 - year old animal at December 31, 2018                                               5,000

                        1 - year old animal at January 1, 2018 and July 1, 2018                   3,000

                         2 - year old animal at January 1, 2018                                                       4,000

 

QUESTIONS:  Based on the above and the result of your audit, answer the following:

1. The milk should be valued at
2. The increase in value of biological assets in 2018 due to price change?
3. The increase in value of biological assets in 2018 due to physical change?
4. The carrying amount of the biological assets as of January 1, 2018
5. The carrying amount of the biological assets as of December 31,2018