As at June 2012, Apple owns an item of  machinery.  The machine is measured using  the cost model, its carrying amount is $220,000 (original cost ($352,000) and  its estimated remaining life is 5 years.

Managers have inspected the machinery and  taken into account economic conditions, which indicate possible impairment, and  carry out testing for impairment

The information below shows the asset values  at various dates.

Date	Fair value less costs to    sell	Future cash flows
30/06/12	$78,000.00	$-
30/06/13	$75,000.00	$44,300.00
30/06/14	$59,000.00	$42,900.00
30/06/15	$43,000.00	$41,100.00
30/06/16	$25,000.00	$49,450.00
30/06/17	$3,000.00	$50,650.00

 

The pre-tax discount rate for calculations of  recoverable amount is 10%.  Depreciation  method is straight line.  No impairment  for the 2013/2014 year is indicated.   Apple Ltd improves the performance of the machinery at the beginning  of the 2014/2015 year, at a cost of $50,000.   The same discount rate can still be used.  The asset value information is adjusted as  follows:

Date	Fair value less costs to    sell	Future cash flows
30/06/14	$80,000.00	$-
30/06/15	$75,000.00	$69,900.00
30/06/16	$48,000.00	$66,100.00
30/06/17	$29,000.00	$59,450.00

 

Prepare general journal entries to account  for the machinery from 1 July 2012 to 30 June 2014 in accordance with the  requirements of AASB 116 and AASB 136