CourseLover

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About CourseLover

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Teaching Since: May 2017
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Education

  • MCS,MBA(IT), Pursuing PHD
    Devry University
    Sep-2004 - Aug-2010

Experience

  • Assistant Financial Analyst
    NatSteel Holdings Pte Ltd
    Aug-2007 - Jul-2017

Category > Accounting Posted 09 Dec 2017 My Price 10.00

Calculate the impairment loss

Liz Ltd classes its entire company as one cash-generating unit (CGU). Economic indicators suggest the company’s assets may have been impaired for the year ending 30 June 2016. Management determined that as at 30 June 2016 the value-in-use of the CGU was $645 000. The extract from the draft statement of financial position for 30 June 2016 showed the following assets:

Cash                                                   $ 5000

Receivables (net)                                 26000
Inventory                                                34000
Machinery                                             215000
Accumulated depreciation – machinery                      (35000)

Building                                                                              455000
Accumulated depreciation – buildings                    (95000)

 Patent                                                                         95000

Goodwill                                    19000

The receivables were regarded as collectable, and the inventory’s fair value less costs to sell is equal to its carrying amount. The patent had a fair value less costs to sell of $90 000.

Required:

Calculate the impairment loss and prepare the necessary journal entries for the year ended 30 June 2016.

 

Answers

CourseLover
(12)
Status NEW Posted 09 Dec 2017 03:12 PM My Price 10.00

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