At 30 June 2022, Boxes Ltd reported the following assets.

Land $100 000

Plant $500 000

Accumulated Depreciation (100 000)

Goodwill 16 000

Inventories 80 000

Cash 4 000

All assets are measured using the cost model.

At 30 June 2022, the recoverable amount of the entity, considered to be a single CGU, was $544 000.

For the period ending 30 June 2023, the depreciation charge on plant was $36 800. If the plant had not been impaired the charge would have been $50 000..

At 30 June 2023, the recoverable amount of the entity was calculated to be $26 000 greater than the carrying amount of the assets of the entity. As a result, Boxes Ltd recognised a reversal of the previous years impairment loss.

The journal entry relating to impairment reversal is

a.

Reversal of impairment is not allowed

b.

Accum. impairment losses Land Dr 5 652

Accum. deprec. & impairment losses Plant Dr 20 348

Income reversal of impairment loss Cr 26 000

c.

Accum. impairment losses Land Dr 8 000

Accum. deprec. & impairment losses Plant Dr 18 000

Income reversal of impairment loss Cr 26 000

d.

Accum. impairment losses Land Dr 7 200

Accum. deprec. & impairment losses Plant Dr 18 800

Income reversal of impairment loss Cr 26 000

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